Tesla shares suffered their biggest drop in two years on Wednesday after Elon Musk, the company’s chief executive, revealed he had sold $3.9 billion worth of stock. As a result, shares fell 7.2% to $177.59, the lowest level since Nov. 23, 2020, writes Reuters. The other day, one of Tesla’s shareholders sued Elon Musk because he awarded himself a salary of 56 billion euros in 2018.
Musk’s latest stock sale has fueled nervousness over the fallout from the Twitter acquisition on the world’s most valuable automaker, analysts said.
The acquisition has raised concerns among investors, including fears that Elon Musk could be distracted from running Tesla or divert resources to the social media company. Some investors also worried about the potential impact on Tesla’s sales and brand, as well as potential pressure on Tesla from countries seeking to control online discourse.
“We may have needed cash to really complete the Twitter business, but restructuring and turning around the business will prove more costly than expected,” said Ed Moya, senior market analyst at OANDA, quoted by Reuters.
“I think investors are concerned that this is not the end of his stock sales,” he added.
Tesla shares have fallen nearly 60% since hitting a record high on November 4 last year. Four days later, Musk began selling his shares.
The latest sale brings the total amount of Tesla shares Musk has sold since last November to around $36 billion – despite previously saying he won’t be selling any more shares.
Musk said last month he believed a recession would last through the spring of 2024, which would hurt demand for electric cars.
Analysts expected Musk to sell more Tesla shares to fund the $44 billion deal with Twitter, but it was unclear whether the sales were tied to the Twitter acquisition.
Tesla declined to comment on the purpose of the stock sale.