China Fund News reporter Wen Jing
After the high-profile acquisition of Twitter, Musk made a large reduction in Tesla stock.
According to the latest disclosure of SEC documents, Tesla CEO Musk recently sold about $4 billion (about 26.5 billion yuan) worth of Tesla stock.
Musk previously announced a $44 billion acquisition of Twitter, of which $21 billion would be personally on his part. Therefore, Musk's reduction in Tesla shares was interpreted by the market as raising funds for the acquisition of Twitter.
Musk said that after the reduction, there is no plan to further sell Tesla shares.
Musk sold about 26.5 billion yuan of Tesla stock
According to Elon Musk's Form 4 form filed with the U.S. Securities and Exchange Commission, Musk sold a total of 4.4 million shares of Tesla stock in the two consecutive trading days beginning April 26, with a total value of $3.99 billion (about 26.533 billion yuan), according to Bloomberg estimates.
Image source: SEC
Today (April 29), Musk publicly stated on Twitter, "After this reduction, there is no plan to further reduce tesla shares." ”
On April 26, Tesla's stock price fell 12% on the same day, and its market value evaporated by $125.626 billion, or about 823.7 billion yuan.
On the same day, Some Wall Street analysts believed that Musk may sell Tesla shares in order to raise funds to acquire Twitter. At present, although Musk is still the "richest man in the world", the main component of his wealth is Tesla stock. Therefore, many investors believe that Musk will sell Tesla shares to cash out in order to acquire Twitter. Previously, Musk's selling of Tesla stock caused Tesla to fall sharply.
In fact, Musk's reduction has been planned since last year, but since the transaction to buy Twitter was just announced on Monday, this reduction is easily reminiscent of this acquisition financing.
According to a number of foreign media reports, the sale of Tesla shares can provide direct cash on the one hand, but Tesla's stock price may also fall under pressure. Investors have previously worried that if Musk is distracted by the acquisition of Twitter, and may even fund the deal by selling Tesla shares, it will affect Tesla's normal operations.
A drop in Tesla stock will put pressure on Musk's acquisition financing, as Musk's $12.5 billion margin loan is secured by Tesla stock. If Tesla shares fall below $740, down 15 percent from Thursday's close, Musk won't be able to meet the $12.5 billion funding requirement and risk running out of margin.
In mid-November, Musk had sold about 6.36 million shares of Tesla stock in a week, cashing out about $6.9 billion (about 44 billion yuan), according to Bloomberg estimates, and the stock price fell more than 15% in three days.
Twitter reached a $44 billion acquisition deal with Musk
On April 25, social media platform Twitter accepted Elon Musk's acquisition deal. Under the deal, Musk will buy Twitter for $54.20 per share, totaling about $44 billion.
Twitter said Musk will pay $21 billion directly for the acquisition and has secured another $25.5 billion in financing, including debt financing and margin loan financing.
According to filings with the U.S. Securities and Exchange Commission (SEC), Musk's financing plan includes $13 billion in bank loans and $21 billion in cash, which could be achieved through the sale of Tesla stock. It also includes a $12.5 billion margin loan, collateral for his tesla stock. Because banks need a lot of cushions and Tesla stock is volatile, Musk needs to pledge about $65 billion in Tesla stock, a quarter of his current total holdings, to get the loan.
The deal is expected to close in 2022, and upon completion of the deal, Twitter will become a privately held company. Reuters reported that the world's richest people will control the social media platform with hundreds of millions of users, including global leaders.
Musk tweeted on the same day that he hoped the company would continue to provide a platform for people to express different opinions. In addition, Musk also said that he hopes to make Twitter's algorithm public to clarify the specific logic of content recommendation and blocking.
After the announcement of the acquisition, as of the close of trading on April 25, local time, it was specially quoted at $51.69 / share, up 5.64%, with a market value of $39.477 billion.
Musk announced on the 14th of this month that he intends to acquire Twitter and take it private. But his proposal was quickly rejected by Wall Street because it was unclear whether he could come up with the money to complete the deal.
Subsequently, the US Twitter company said on the 15th local time that its board of directors unanimously approved the launch of the "poison pill plan" to crack down on the "hostile takeover" of Twitter by Elon Musk, the founder of the US Space Exploration Technology Company and CEO of Tesla.
After buying Twitter, Musk still wants to buy Coca-Cola?
Not long after Musk publicly announced his acquisition of Twitter, on April 28, Tesla CEO Elon Musk Musk tweeted that next, coca-cola will be acquired, and then "cocaine will be added back to the beverage recipe."
Musk then posted, "Listen, I can't do miracles. （Listen, I can’t do miracles ok）。 It also attached a screenshot of a tweet he had previously said he wanted to buy McDonald's.
It can be seen that Musk's acquisition plan for Coca-Cola may be just a joke. After all, it has just raised a lot of money to buy Twitter.
It is estimated that Coca-Cola's current market capitalization is about $284.2 billion, while Musk's wealth is currently $253 billion. That is to say, if you really want to buy Coca-Cola, Musk is still not enough to take his own wealth.
Edit: Joey