Musk sells $ 4 billion of Tesla shares after sealing the Twitter deal

(Bloomberg) – Elon Musk sold Tesla Inc. stock days for about $ 4 billion after reaching a $ 44 billion deal to buy Twitter Inc.

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Tesla’s CEO relieved 4.4 million shares on April 26 and April 27, according to regulatory archives. Musk has now divested more than $ 20 billion worth of inventories in the electric car maker over the past six months.

The world’s richest man reached an agreement on April 25 to acquire Twitter using a financing plan that has troubled some Tesla investors. In addition to pledging tens of billions of dollars of its Tesla shares to support margin loans, Musk has promised to raise equity of about $ 21 billion. It has been unclear how much of that would come from selling part of his Tesla stake.

Tesla shares rose 3% from 1 p.m. 04.30 Friday in New York before the regular trade begins. The company has lost a market value of about $ 275 billion since Musk first revealed it had taken a stake in Twitter earlier this month.

“It’s a brutal cycle for Tesla investors to navigate and cast a shadow on the name,” said Dan Ives, a Wedbush analyst who responds to a buy rating on the stock. “The Twitter deal is becoming an albatross for Tesla’s share.”

Musk, 50, tweeted after the applications were released Thursday that he “has no plans for further Tesla sales after today.” It is unclear if he may have sold more than $ 4 billion. The tweet could indicate that there were several disposals on Thursday, which should be reported before Friday.

The Twitter deal is poised to become one of the largest leveraged buyouts in history, with Musk arranging $ 25.5 billion in debt and margin loans from lenders including Morgan Stanley. If it were to fall apart, the party violating the agreement would have to pay a $ 1 billion termination fee under certain circumstances.

Twitter shares closed Thursday at $ 49.11, which is less than the $ 54.20 that investors will receive for each share they own under the company’s deal with Musk.

Musk’s pursuit of Twitter has once again highlighted the extent to which Tesla’s valuation depends on how involved and invested its CEO is in the business. He has led the company since 2008 and has long been its largest shareholder.

Tesla’s stock fell late last year as Musk relieved shares of more than $ 16 billion, his first sale in more than five years. The divestment started in November after Musk asked Twitter users whether he should trim his efforts.

With a fortune of $ 252.2 billion, Musk is the world’s richest person, according to the Bloomberg Billionaires Index. But the recent drop in Tesla shares has shaved off $ 18 billion of his net worth this year, even as the automaker reported better-than-expected earnings earlier this month.

(Updates to add context started in seventh section)

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