Elon Musk has a very bad surprise for Tesla shareholders
Tesla’s Fear (TSLA) – Get a free report Shareholders and fans are confirmed.
Elon Musk, CEO of the famous high-end electric car maker, is paying a heavy price for the acquisition of Twitter (TWTR) – Get a free report.
And it’s not surprising that Tesla is paying the price. This billionaire just sold 19.5 million Tesla shares for a total value of 3.95 billion USD, according to regulatory documents Submit your application on the evening of November 8th.
The purchase was completed in 38 transactions on November 4, 7, and 8, just days after the Twitter acquisition. complete. The tech mogul took control of the social network on October 27 after a six-month battle marked by twists and turns and court stops.
The material therefore confirm Speculations have been circulating in recent days. According to these rumors, which were not commented on by Musk, he will have to sell Tesla stock to reach a deal.
Wedbush analyst Dan Ives said: “Musk sold $4 billion of Form 4 stock. “The Twitter deal is still an albatross in many ways but there seem to be concerns about selling the stock. Musk’s should now be done. Tesla stock has plummeted since the Twitter deal. Disappointing situation for all.”
Migration of advertisers
Twitter has cost Musk too much, $44 billion. The billionaire is owed about $13 billion guaranteed based on his remaining stake in Tesla as part of lever repurchase. Since taking over on October 27, he has been trying to find sources turnover for social networks.
The problem is that he will have to dig deeper than that because the company is losing $4 million a day, according to the billionaire. Advertiser after advertiser is suspending the promotion of their products and services on the platform for fear that it will become a “graveyard” under Musk, who describes himself as “the freedom of speech”.
Ads account for more than 91% of Twitter’s revenue.
Gene Munster, managing partner at Loup Funds, warned on November 7 that Musk could be forced to sell more Tesla stock if advertisers continue to leave Twitter.
Munster told CNBC on Nov. 7: “They have a month here to clean things up and urge people to reset their products and ask advertisers to understand what censorship is about their content.” “, Munster told CNBC on Nov. 7. “If that gives the current environment, he’s going to have to sell the stock.”
‘Avoid emergency discounts’
This is the third time Musk has sold Tesla stock this year. He sold more than $8 billion in shares of the electric-car maker in April and sold nearly $7 billion in Tesla stock in August to finance the deal.
In August, he said, in a Twitter exchange with a Tesla shareholder and fan, that he had sold his shares to avoid having to do so urgently in the event of a forced buyout. He also said he will not sell any more Tesla shares, at least this year. At the time, the technician pulled his offer to buy from the table but had to back it up on October 4 a few days before starting testing, which was not good for him.
It’s thus a huge face for the billionaire, whose essential fortune is based on his stakes in Tesla and his aerospace company SpaceX.
“@elonmusk are you done selling yet?” Twitter user asked him on August 9.
“Yes,” Musk replied. “In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t go through it, it’s important to avoid an emergency sale of Tesla stock.”
At the end of the trading session on November 7, Tesla shares fell to a 52-week low, at $186.75
Tesla shares have fallen 15% since Musk finalized the deal on Twitter on October 27. Since Musk announced his bid on April 25, Tesla stock has lost a total of 43% of its value. down to 191.30 USD. This represents a drop in market value of about $454 billion.
Tesla, by far the sixth largest company in the world by market capitalization, was surpassed by Berkshire Hathaway on Nov. (BRK.A) – Get a free reportparent company of legendary investor Warren Buffett.
The more Musk gets involved in Twitter, the deeper Tesla sinks in the stock market. The billionaire said on November 4, at the Baron Investment Conference, that his workload has increased from “78 hours a week to probably 120 hours” since he bought Twitter.
In the long-term, Munster believes the Twitter acquisition won’t be a problem specific to Tesla, whose roadmap is filled with products like the Semi truck on December 1, the highly anticipated Cybertruck on December 1, and the highly anticipated Cybertruck on December 1. mid-2023, robotaxis in 2024, and robot Optimus in 2023.
“Musk’s purchase of Twitter makes little sense for the future of Tesla and SpaceX,” Munster Written in a research note last month. “He will continue to devote most of his energy and time to both companies.”