Elon Musk sells nearly 8 million shares of Tesla, what does that mean?

New York (CNN Business) – Elon Musk has sold 7.9 million shares of Tesla in recent days, raising $6.9 billion in sales.

Sales for Friday through Tuesday were revealed in a series of filings with the Securities and Exchange Commission on Tuesday evening. It represents Musk’s first sale of Tesla shares since April, when he sold 9.6 million shares, raising $8.5 billion in the time.

Those April sales came shortly after Tesla CEO Musk struck a deal to buy Twitter for $44 billion. But it announced a month ago that it had no plans to go ahead with the deal, arguing that Twitter’s management had failed to disclose material information about how many user accounts were bots and spam accounts rather than accounts run by real people. Twitter (TWTR) quickly filed a lawsuit to force Musk to move forward with the deal under terms reached in April.

Musk’s files did not reveal the reason for selling the shares. But after someone asked him on Twitter if he had finished selling Tesla stock, he answered “yes” and then cited the possibility of him being forced to buy Twitter as the reason for this latest sale.

“In the event (which we hope is unlikely) that Twitter forces this deal to close *and some equity partners don’t show up, it’s important to avoid selling Tesla stock,” he said in his tweet.

But while he sold Tesla (TSLA) shares in April, he tweeted: “No more TSLA sales planned after today.”

When asked by someone else on Twitter on Tuesday if he would buy Tesla stock again if the Twitter deal didn’t close, he answered “Yes.”

Tesla shares have lost nearly 20% of their value so far this year, although they have rebounded 14% since it reported earnings in late July.

“This is the last thing Tesla investors wanted to see,” said Daniel Ives, technology analyst at Wedbush Securities. “The biggest fear was that Musk was going to sell more shares, and that’s just what happened. It’s a short-term punch. There is no explanation and this increases the uncertainty.”

Musk previously sold Tesla shares primarily when he needed to raise money to pay taxes on his expired option exercises. The sale of shares in April, shortly after the Twitter deal was struck, was the first major sale of Tesla stock by Musk for reasons other than an impending tax bill.

Musk earned an average price of $869 per share for the shares he has sold in recent days. That’s below the average price of $883 per share on Tesla sales in April, and well below the average price of $1,046 he earned when he sold 15.7 million shares late last year. This sale was to cover the expected standard personal income tax bill that he faced as a result of exercising the options that had expired.

Even with the latest stock sales, Musk owns 155 million shares of Tesla and has options to buy nearly 100 million more at a fraction of current prices. The shares you own, along with the options you have to buy other shares, give you control of approximately 20% of Tesla’s outstanding shares. The 7.9 million shares he just sold represent less than 3% of the stock and options he owns.

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