The records do not reveal the reason for the sale, but Musk appears to be raising funds to buy Twitter. In a tweet Thursday night, Musk said: “No further TSLA sales are scheduled after today.” But it was not clear if Musk had made further sales since Wednesday that have not yet been reported. Company members, such as Musk, should report purchases or sales of their company shares to the SEC to inform the wider investment community about their activities. But they have a few days to make this deposit and still abide by the rules. Sales of Tesla shares by Musk were large enough to sink the company’s share price. Most of the shares he said sold this week – 3.7 million – were sold on Tuesday. This represented 17% of the normal daily value of trading in Tesla shares so far this year before Tuesday. Tesla shares lost 12.2% of their value during trading on Tuesday, the biggest one-day drop in the company’s stock since September 2020. The share drop caused a burst of sales from other investors, as 45 million shares were traded hands – about twice the volume of transactions from the previous day. Tesla investors could also have sold shares this week out of concern that Musk might not be giving so much time and attention to Tesla. The company has ambitious development plans and growing competition. Tesla shares hardly changed on Wednesday and Thursday. The stock rose 3% in pre-market trading on Friday. Musk is expected to use his huge stake in Tesla as a way to fund the Twitter market. But that does not mean he has to sell all his shares to raise the full purchase price. Instead, he can use the shares as collateral for loans to raise cash. But there are limits to how much money he can simply pledge on his shares in Tesla as collateral. He can raise more money by selling some of his shares in Tesla. Tesla’s corporate rules state that the company’s executives and executives can only collect 25% of the value of the share that is pledged as collateral. As of June 30, 2021, company records show that Musk had already pledged 88.3 million of his shares in Tesla as collateral, but these shares were pledged years ago when Tesla shares were worth a small fraction of the current their value. He would probably be able to borrow more money even for some of these shares. And the estimated 79 million unsecured shares it holds after Tuesday’s sales could be used to borrow $ 17 billion, even with the recent fall in Tesla’s share price. Correction: An earlier version of this story incorrectly stated the number of Tesla shares that Elon Musk sold, the value of the shares, and when he sold them. Musk sold $ 4.4 million worth of stock, valued at $ 4 billion, on Tuesday and Wednesday.
