Elon Musk’s Tesla share sales approach the $40bn mark

Tesla’s market value also slumped below the half-trillion-dollar mark for the first time since November 2020. 

Elon Musk sold another $3.6bn (€3.4bn) worth of Tesla shares, bringing the total amount he’s offloaded since late last year to almost $40bn (€37bn).

The latest disposal of about 22 million shares this week coincided with Mr Musk falling from the top spot on the Bloomberg Billionaires Index, a position he’d occupied since September of last year.

Tesla’s market value also slumped below the half-trillion-dollar mark for the first time since November 2020.

Mr Musk’s persistent selling after repeated assurances that he was done unloading Tesla stock reflects mounting pressure on the finances of Twitter.

His erratic and impulsive approach to running the social-media company has alienated advertisers, and efforts to bring in more revenue from subscription fees backfired when impostor accounts exploited a poorly executed rollout of verification badges.

Tesla struggles

The chaos at Twitter has been an overhang on Tesla, which is facing its own set of challenges.

The electric-car maker has cut prices and production this quarter in China and taken the rare step of offering incentives in the US.

Mr Musk has said the company is struggling to cope with the effects that China’s slumping property market, Europe’s energy crisis, and the Federal Reserve’s interest rate increases are having on demand.

Tesla stock has plunged 55% this year.

Mr Musk tried for months to get out of the Twitter deal but ultimately failed.

To help finance the purchase, he offloaded more than €14bn of Tesla shares before closing the transaction, about €7.9bn in April, then €6.4bn in August.

Mr Musk layered a significant amount of high-interest debt on Twitter’s balance sheet as part of his buyout.

The company’s debt load swelled to about €12bn, up from €1.6bn pre-deal, and it’s now facing annual interest payments approaching €1.1bn.

Interest rates to rise

Its borrowing could get even more expensive because the interest rates on about half of that debt aren’t locked in and will rise with the market.

“At risk of stating obvious, beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates,” Mr Musk tweeted this week.

Mr Musk’s recent sales shrink his stake in the company to roughly 13%, according to Bloomberg data.

As of Wednesday’s close, he dropped to the No. 2 ranking on the Bloomberg Billionaires Index after France’s Bernard Arnault. His fortune has dropped by €102bn this year.

Meanwhile, Twitter suspended multiple accounts that track the locations of private jets using publicly available flight data, including one that followed the plane used by Mr Musk.

Mr Musk publicly declared last month that he would not ban the account even though he saw it as a safety risk, saying that it was evidence of his commitment to free speech.

The @elonjet page showed a message that read “account suspended” because it violated the platform’s rules.