Elon Musk Selling Parts Of Tesla To Hold Onto Twitter?
Elon Musk has sold nearly $4 billion in Tesla stock since the Twitter deal was closed, causing some to speculate he is using that company to fund his new one.
This article is more than 2 years old
It seems as though the media can’t get enough of Elon Musk. From Tesla recalls, to new inventions, to the Twitter ownership deal, there is a lot happening for this entrepreneur. Many are questioning Musk’s decision to purchase Twitter, especially after he sold over four billion dollars worth of electric car company Tesla’s stock, since the deal was made.
Musk completed his purchase of the social media company Twitter in late October. He sold $3.95 billion dollars worth of Tesla stock since this deal was made. Musk has over $19.5 million shares, and it has been on everyone’s mind as to how he will pay for Twitter, coming in at $44 billion dollars. When the deal was initially announced earlier this year, musk sold 15.4 billion dollars worth of Tesla stock, as many anticipated his preparation for the big purchase.
Consumers raise concerns as to whether or not Musk used fundraising to pay for the Twitter deal. Some also believe he may have sold the Tesla stock in order to support losses at the social media company after the purchase. Last week, Twitter saw a massive drop in revenue, which will only prove to make Musk’s life as the owner of Twitter more difficult.
With layoffs on the rise and inflation skyrocketing, a drop in revenue is not a promising sign. Many advertisers have backed out of paying for ads on Twitter’s platform, simply because of Musk’s new ownership. Musk has blamed activist groups for bringing extremist pressure on once valuable advertising partners, which is also impacting Tesla’s brand.
Even before Musk took over Twitter, the company was losing money. At the end of June, Twitter lost over $270 million dollars in one quarter. Advertisers have been dropping out of their partnerships ever since. Musk has announced a plan to counteract this, by charging users a flat fee for verified accounts, and also making headcount cuts at Twitter and Tesla, in order to save on costs.
In the first two weeks of Musk’s Twitter purchase, there have been many twists and turns. Big monetary losses at Twitter and Tesla have been occurring, leaving many skeptics to pose questions as to what the cause truly is. Dan Ives, a tech analyst, has even alluded to Musk’s ownership of Twitter becoming a “quicksand” deal.
If you own stock in Tesla, now is not the best time to be selling your precious shares. The shares of Tesla stock have lost nearly 46% of their value in 2022. Since the Twitter deal closed, Elon Musk has faced a price of nearly $202 per Tesla share. However, this decline is not only the fault of the Twitter deal, but an increase in competitors in the space such as Ford, General Motors, and Volkswagen, who are releasing electric cars in the new year.
Investors are not pleased with Musk’s leadership, especially when it comes to the Twitter deal. Tesla investors are saying that musk needs to refocus on his original project, which is the electric car brand. Tesla is in need of innovation and Musk’s leadership now more than ever.
