Elon Musk dumps more Tesla shares; goes against his word

This week, Elon Musk disclosed an additional $4B sale in Tesla shares, despite saying he was done selling — bringing his total liquidation to ~$36B in the past year. $TSLA has lost over half its value this year, and investors are having doubts.

Will he continue selling his remaining ~14% of Tesla shares? That depends on Twitter’s financial situation — a hot mess that Musk is bankrolling now.

• Musk said Twitter was losing $4M per day (~$1.5B a year) after advertisers dropped the platform, including Tesla competitors GM and Audi.
• To finance the Twitter deal, Musk also took out ~$13B in debt, which requires ~$1.2B in interest payments each year.

The ad market is also in decline. Even the rising star TikTok lowered its sales target by 20% as advertisers cut marketing budgets.

Unless Twitter suddenly starts pumping cash, Musk will likely have to continue selling Tesla shares — meaning more downward pressure on Tesla’s stock price.

And now his attention is divided between being the CEO of Tesla, Twitter, SpaceX and The Boring Company. One man can only do so much.

Not the only thing investors should worry about…

Auto demand has held up quite well, considering the state of the economy. GM and Ford say they’ll clear large order backlogs by the end of the year. But the question on every auto investor’s mind is: how will demand hold up after?

• This quarter is crucial for Tesla. Musk set expectations really high, and if he fails to deliver, the stock could take another tumble.
• Will Tesla trade higher than where it is today in five years? We’ll take a guess and say yes. But it’s the opportunity cost that matters.