Musk plans to sell $10 bln in Tesla shares

Reputable economic analysts in the United States said that billionaire Elon Musk, CEO of “Tesla” electric car company, may have to sell up to $ 10 billion worth of Tesla shares he owns.

According to “Business Insider”, Musk may sell this huge amount of his shares in “Tesla” within the next few days to complete the controversial acquisition of Twitter.

According to “Al Arabiya”, Wedbush analyst Dan Ives said, in a note on Friday, that Elon Musk may have to sell between $5 billion to $10 billion of Tesla shares next week to be able to complete a purchase.” Twitter” worth $44 billion

Musk currently owns $12.5 billion, but is looking for outside investors to come in and help provide another $32 billion he needs to finish the Twitter deal, while analysts say the current bleak stock market environment makes Musk’s persuasiveness to investors of the opportunity to invest in Twitter even more.

“It’s very simple, the more investors save this deal, the more money Musk needs to contribute and thus sell more Tesla shares,” Ives continued.

The deadline for the deal is set for October 28, which means that Musk faces a watershed week, which means he is likely to sell Tesla shares in the next few days.

Ives described the situation as “brutal” for Tesla investors, as they will eventually have to “bear the burden” of potential Musk stock sales.

Musk’s stock sales will come at a time when the electric car company is considering repurchasing shares for the first time ever, at between $5 billion and $10 billion, Musk himself said following the announcement of third-quarter earnings last Wednesday.

According to Ives, what makes matters worse is that Musk’s deal to buy Twitter is not a good deal based on its current price.

“Twitter’s $44 billion price tag is just a train wreck, with fair value at best in the $30 billion range amidst tough growth challenges like Mount Everest,” Ives said.

Recent reports suggest that Musk may quickly reduce Twitter’s headcount by as much as 75% when he takes over the company, but Ives doubts such deep cuts will make the deal better.

“Clearly massive cuts in staffing and expense controls have to be done on a $44 billion leveraged deal, and Twitter has been very late in cutting costs due to lack of growth,” says Ives.