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| Elon Musk, owner of Twitter and Tesla. REUTERS |
Analysts remain dubious about how the $44 billion purchase deal for Twitter was finally financed.
Elon Musk, Tesla's chief executive, sold at least $3.95 billion of shares in the electric vehicle maker in the days after closing the Twitter purchase. The billionaire tycoon dumped 19.5 million shares, according to regulatory filings Tuesday in New York. The documents, analyzed by Bloomberg, do not indicate the transactions were planned in advance.
Musk, the world's richest person, achieved his goal of controlling the social network in October after months of negotiations. In August, he had said that he would no longer divest his Tesla shares and that it was important to avoid an "emergency sale" of the shares in case he had trouble getting new partners for the Twitter acquisition. Tesla shares plunged 7.17% at the close of the day on Wall Street.
Doubts about the acquisition of Twitter
Analysts are still unsure how the $44 billion purchase deal for Twitter was finally financed, beyond the roughly $13 billion committed by Wall Street banks. Musk has never publicly addressed how he planned to raise the money needed to close the deal.
Furthermore, Twitter is in a delicate position. Since Musk took over, several major companies like Loreal have suspended their ads on the platform, waiting to see how it evolves under the billionaire's leadership. Musk acknowledged last week that the social network is suffering a "massive drop in advertising revenue" due to the withdrawal of these advertisers, for which he blamed "activist groups" that put pressure on the platform.
The billionaire's drastic moves to cut costs - including laying off roughly half the staff and the entire board of directors - and overhauling all of the platform's operations have led to a tumultuous two weeks at the company.
"It looks like Musk is preparing for things to continue badly at Twitter for the next year," said Gene Munster of Loup Ventures after the share sale was made public. "He is preparing to make Twitter a money hole."
The deal has also raised concerns among some Tesla shareholders that the CEO will extend the layoffs to Tesla as well while continuing to sell his shares in the firm. Musk has already sold about $36 billion of shares in the automaker in the past year, about half since he went public with the Twitter buyout plan, according to data compiled by Bloomberg.
Shares in the electric car maker are down 53% from their high last year, pushing Musk's fortune to $179.5 billion, up from $340 billion at the high, according to the Billionaires Index. Bloomberg.
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