Tesla stock hits 2-year low after Elon Musk sells shares worth $4 billion

Musk's latest share sale fueled jitters about the fallout of his $44 billion Twitter buy on the world's most valuable automaker, analysts said.

Musk unloaded 19.5 million shares between Friday and Tuesday, San Francisco, Reuters

Tesla Inc shares slid to their lowest level in nearly two years on Wednesday after Chief Executive Elon Musk disclosed he sold another $3.95 billion worth of shares in the electric-vehicle maker.

Shares ended down 7.2% at $177.59, the lowest level since Nov. 23, 2020.

Musk's latest share sale fueled jitters about the fallout of his $44 billion Twitter buy on the world's most valuable automaker, analysts said. The acquisition sparked investor concerns, including whether he would be distracted from running Tesla or divert resources to the social media company. Some investors also feared the possible impact on Tesla's sales and brand, as well as potential pressure on Tesla from countries trying to control online speech.

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"He might have needed the money to really finalize the Twitter deal but restructuring the company and righting the ship is going to prove to be more costly than he probably expected," OANDA senior market analyst Ed Moya said.

"I think investors are concerned that this might not be the end of his stock sales," he added.

Tesla shares have fallen nearly 60% since touching a record high on Nov. 4 of last year. Four days after that, Musk started unloading his shares.

The latest sale brings the total amount of Tesla stock sold by Musk since last November to about $36 billion - despite his having said earlier that he would sell no more of his shares.

Musk "yet again loses more credibility with investors and his loyalists in a boy who cried wolf moment," Wedbush Securities analyst Dan Ives said.

Musk, said Ives, needs to end "Twitter overhang on the Tesla story with his focus back on the golden child Tesla which needs his time more than ever given the soft macro, production/delivery issues in China, and EV competition increasing from all corners of the globe."

Musk said last month he thinks a recession will last until the spring of 2024 and that "a recession of sorts" in China and Europe was weighing on demand for its electric cars.

Musk unloaded 19.5 million shares between Friday and Tuesday, according to filings published by the U.S. Securities and Exchange Commission late on Tuesday.

Analysts had expected Musk to sell more Tesla shares to finance the $44 billion Twitter deal, but it was not clear whether the sales were related to the Twitter acquisition.

Musk last month closed the deal with $13 billion in loans from banks and a $33.5 billion equity commitment, which included $7.1 billion from investors, including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal. It is not clear whether all of the equity investors lived up to their equity commitment.

Tesla did not respond to a request for comment on the purpose of the share sale.

Twitter faces interest payments totaling close to $1.2 billion in the next 12 months on the debt that Musk piled on it.

Musk said that Twitter has suffered a "massive" revenue drop since he took over, blaming civil rights activists pressuring advertisers. Major advertisers like General Motors have pulled their ads off Twitter following concern that Musk could loosen content moderation rules on the service.

The new Twitter owner told advertisers on Wednesday that paid Blue subscription accounts would become more important and prominent.

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