Tesla’s Elon Musk sold shares to fund a Twitter deal. Here’s how much.

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Now investors know one reason

Tesla the stock has fallen – CEO Elon Musk had many shares to sell.

Musk revealed Tesla (ticker: TSLA) stock sale Thursday night on Form 4s filed with the Securities and Exchange Commission.

A form 4 is used to reveal the sale of the company management and other company insiders.

Musk sold 4.4 million shares worth of Tesla shares worth around $ 4 billion, presumably to finance part of his purchase of

Twitter (TWTR). Musk sold its shares on April 26 and 27, according to Form 4, which is usually submitted within days of sale.

Musk’s $ 54.20 bid for Twitter was accepted by the board on social media earlier this week. The device formed by Musk to buy Twitter will be financed with around $ 25 billion in debt and $ 21 billion in equity. How Musk would finance the shareholding has been hotly debated by analysts and investors.

It turns out that part of this amount was financed by the sale of Musk’s Tesla share.

He said on Twitter on Thursday night that he has no plans to sell more shares.

It could be a relief for Tesla investors. Potential Musk sales were an overhang for the Tesla stock, according to Wedbush analyst Dan Ives. Tesla shares have fallen around 12% since Musk’s bid was accepted. The

S&P 500
and

Nasdaq Composite
has fallen around 0.2% and 1% over the same period.

The $ 4 billion is far less than the total $ 21 billion stake listed in the Twitter merger documents. This may mean that some other sources will be involved in the deal to raise the remaining $ 21 billion in equity required for the purchase. The rest of the money can come from a combination of Musk’s cash – from gains in cryptocurrency or something else – existing Twitter shareholders who stay with Musk, or partners who are willing to invest with Musk.

Shares of Tesla fell 0.5% on Thursday, closing at $ 877.51 after trading as low as $ 821.70. The stock fell 2.6% in after-sales to $ 854.50.

Musk still owns around 168 million shares in Tesla, not including the over 100 million share options that were granted as part of his compensation package for 2018.

Musk does not like to use brokers to organize secondary sales. He sold his shares in around 140 separate, smaller transactions. This is not the way large stock blocks are usually sold, but it is how Musk sold shares back in 2021. These sales had to do with the exercise of options and accelerating tax payments on unrealized capital gains.

Write to Al Root at allen.root@dowjones.com