22 ms·

>If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse. So why didn't the stock price collapsed when he sold $15B in Dece

>If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse. So why didn't the stock price collapsed when he sold $15B in December 2021? https://www.reuters.com/markets/deals/teslas-musk-says-he-sold-enough-stock-slams-california-overtaxation-2021-12-22/ https://www.reuters.com/markets/deals/teslas-musk-says-he-so...

hristov 5y ago
Well if you needed further proof, look at the Tesla price action today. It is doubtful that Musk has even started selling, but the price is already collapsing.
hawk_ 5y ago
because selling another $21b of tesla would indicate he has found other more interesting things to do.
- rcMgD2BwE72F 5y ago
  He bought ~9% of Twitter already. I'm sure his co-shareholders prefer that he takes control over companies he bought in, because he can then easily develop synergies (cf. Boring Co and Tesla, SpaceX and Tesla, SolarCity and Tesla, etc).
  - gopher_space 5y ago
    The problem with this idea is that nobody's really on Twitter for the free speech. He might take the company to new and exciting places, but it won't be with the current userbase.
- kjksf 5y ago
  Or, following Ockham's Razor, it would indicate he needs money to do something with it. Maybe buy $600 million yacht or maybe buy money losing company.
hristov 5y ago
He sold that over two months and the overall market was much stronger then. Also those sales were pretty much required for taxes and thus did not send a negative signal to the market. If he sells large amounts of tsla shares to buy twitter, this will be a negative signal -- any other tesla shareholder can sell tesla shares to buy twitter, and why wouldn't they when the tesla CEO is doing it. It is still possible that he tries to raise 21 billion by selling stock but I doubt it. First if he actually wanted to do that, he would keep quiet while selling and then come out with the tender offer when he had the cash.
- dgfitz 5y ago
  I don’t think it’s possible for him to quietly sell 21B shares. That’s all very public information isn’t it?
  - hristov 5y ago
    It is possible. He has to file certain forms when he sells but the SEC often lets large buyers and sellers have a bit of a delay when making these forms public to avoid front running.
- Pyxl101 5y ago
  Can’t he borrow against his Tesla stock, and other assets including his ownership of SpaceX, and personal property, for cash to buy Twitter? Depending on his banking relationships, and other assets that he can use as collateral for the loan, he might be able to borrow a fairly high percentage of the current value of those assets as cash (maybe 50 to 70 or 80% or more if the collateral assets are diversified or the bank simply has high confidence in his effective credit rating or ability to repay — and he may be doing other business with that bank incentivizing them to give him a favorable deal). I’m not a billionaire but by establishing a strong relationship with a bank, have been able to establish a credit line with a limit that is a high percentage of my assets that are invested by the bank in a diversified portfolio, along with other assets, at a low interest rate (mortgage levels - a credit line at approx 2.5% interest of an amount almost equal to my total assets at the bank). I also recently refinanced my house with this bank starting last winter and was able to achieve getting a 15 year fixed mortgage at a 2.125% interest rate - a huge reduction from my previous rate of 3.5% on a 30 year. I now pay less per month and will own my home much sooner, consequently paying considerably less in interest over the remainder of the loan, and building much more wealth in the process. With some wealth and favorable banking relationships you can accomplish things that most ordinary people don’t know about and I myself didn’t know about until I started looking into the possibilities. I am sure a billionaire has access to even more options than I can conceive of.
_fat_santa 5y ago
This raises another issue, that is can he even sell that many shares of Tesla and still stay in control? IIRC he made a comment about how he was "cash poor" a while back and it basically came down to he can't sell more of Tesla/SpaceX without dipping below 51% and loosing control.
- rootusrootus 5y ago
  > cash poor I wonder what a paper billionaire's definition of 'cash poor' is compared to mine.
  - RansomStark 5y ago
    Grimes gave an interview on this: "[Musk] lives at times below the poverty line," Grimes said, per Vanity Fair. "To the point where I was like, can we not live in a very insecure $40,000 house? Where the neighbors, like, film us, and there's no security, and I'm eating peanut butter for eight days in a row?" [0] In the same article Grimes complains Musk wouldn't replace a broken mattress. No idea how Much this shows Musk is cash poor, and how much it shows crazy rich person, but it gives a glimpse either way [0] https://www.businessinsider.com/grimes-says-elon-musk-sometimes-lives-below-the-poverty-line-2022-3 https://www.businessinsider.com/grimes-says-elon-musk-someti...
    - kurupt213 5y ago
      ‘In the same article Grimes complains Musk wouldn't replace a broken mattress.’ That’s just a humble brag.
    - mywittyname 5y ago
      This sounds like Musk being a "eccentric" person. I have a difficult time believing Telsa couldn't put him up in executive housing and cover a security detail. Or, he couldn't send out a tweet and get a $50 million line of credit, uncallable line of credit to live on. Especially given that he can at get 13 billion dollars to acquire another company. I think he likes bragging about being a homeless couch surfer.
godelski 5y ago
Typically these sales are scheduled and announced well ahead of time and then, like another user pointed out, may be solve over the course of months. So the market typically reacts near the announcement and it isn't much because it looks like business as usual. From the article you linked it specifically says that he was exercising options that would have expired. IIRC he also has another large stock allocation that expire in August of this year and so will be selling those.
- nemothekid 5y ago
  There is no reason why he can't do the same here.
  - godelski 5y ago
    I agree. But what I'm saying is that it will take a few months to execute. I was just trying to expand on the above discussion and why his sales didn't make Tesla stock crash but selling out of the blue would.

hristov 5y ago

Well if you needed further proof, look at the Tesla price action today. It is doubtful that Musk has even started selling, but the price is already collapsing.

hawk_ 5y ago

because selling another $21b of tesla would indicate he has found other more interesting things to do.

rcMgD2BwE72F 5y ago
He bought ~9% of Twitter already. I'm sure his co-shareholders prefer that he takes control over companies he bought in, because he can then easily develop synergies (cf. Boring Co and Tesla, SpaceX and Tesla, SolarCity and Tesla, etc).
- gopher_space 5y ago
  The problem with this idea is that nobody's really on Twitter for the free speech. He might take the company to new and exciting places, but it won't be with the current userbase.
kjksf 5y ago
Or, following Ockham's Razor, it would indicate he needs money to do something with it. Maybe buy $600 million yacht or maybe buy money losing company.

hristov 5y ago

He sold that over two months and the overall market was much stronger then. Also those sales were pretty much required for taxes and thus did not send a negative signal to the market. If he sells large amounts of tsla shares to buy twitter, this will be a negative signal -- any other tesla shareholder can sell tesla shares to buy twitter, and why wouldn't they when the tesla CEO is doing it. It is still possible that he tries to raise 21 billion by selling stock but I doubt it. First if he actually wanted to do that, he would keep quiet while selling and then come out with the tender offer when he had the cash.

dgfitz 5y ago
I don’t think it’s possible for him to quietly sell 21B shares. That’s all very public information isn’t it?
- hristov 5y ago
  It is possible. He has to file certain forms when he sells but the SEC often lets large buyers and sellers have a bit of a delay when making these forms public to avoid front running.
Pyxl101 5y ago
Can’t he borrow against his Tesla stock, and other assets including his ownership of SpaceX, and personal property, for cash to buy Twitter? Depending on his banking relationships, and other assets that he can use as collateral for the loan, he might be able to borrow a fairly high percentage of the current value of those assets as cash (maybe 50 to 70 or 80% or more if the collateral assets are diversified or the bank simply has high confidence in his effective credit rating or ability to repay — and he may be doing other business with that bank incentivizing them to give him a favorable deal). I’m not a billionaire but by establishing a strong relationship with a bank, have been able to establish a credit line with a limit that is a high percentage of my assets that are invested by the bank in a diversified portfolio, along with other assets, at a low interest rate (mortgage levels - a credit line at approx 2.5% interest of an amount almost equal to my total assets at the bank). I also recently refinanced my house with this bank starting last winter and was able to achieve getting a 15 year fixed mortgage at a 2.125% interest rate - a huge reduction from my previous rate of 3.5% on a 30 year. I now pay less per month and will own my home much sooner, consequently paying considerably less in interest over the remainder of the loan, and building much more wealth in the process. With some wealth and favorable banking relationships you can accomplish things that most ordinary people don’t know about and I myself didn’t know about until I started looking into the possibilities. I am sure a billionaire has access to even more options than I can conceive of.

_fat_santa 5y ago

This raises another issue, that is can he even sell that many shares of Tesla and still stay in control? IIRC he made a comment about how he was "cash poor" a while back and it basically came down to he can't sell more of Tesla/SpaceX without dipping below 51% and loosing control.

rootusrootus 5y ago
> cash poor I wonder what a paper billionaire's definition of 'cash poor' is compared to mine.
- RansomStark 5y ago
  Grimes gave an interview on this: "[Musk] lives at times below the poverty line," Grimes said, per Vanity Fair. "To the point where I was like, can we not live in a very insecure $40,000 house? Where the neighbors, like, film us, and there's no security, and I'm eating peanut butter for eight days in a row?" [0] In the same article Grimes complains Musk wouldn't replace a broken mattress. No idea how Much this shows Musk is cash poor, and how much it shows crazy rich person, but it gives a glimpse either way [0] https://www.businessinsider.com/grimes-says-elon-musk-sometimes-lives-below-the-poverty-line-2022-3 https://www.businessinsider.com/grimes-says-elon-musk-someti...
  - kurupt213 5y ago
    ‘In the same article Grimes complains Musk wouldn't replace a broken mattress.’ That’s just a humble brag.
  - mywittyname 5y ago
    This sounds like Musk being a "eccentric" person. I have a difficult time believing Telsa couldn't put him up in executive housing and cover a security detail. Or, he couldn't send out a tweet and get a $50 million line of credit, uncallable line of credit to live on. Especially given that he can at get 13 billion dollars to acquire another company. I think he likes bragging about being a homeless couch surfer.

godelski 5y ago

Typically these sales are scheduled and announced well ahead of time and then, like another user pointed out, may be solve over the course of months. So the market typically reacts near the announcement and it isn't much because it looks like business as usual. From the article you linked it specifically says that he was exercising options that would have expired. IIRC he also has another large stock allocation that expire in August of this year and so will be selling those.

nemothekid 5y ago
There is no reason why he can't do the same here.
- godelski 5y ago
  I agree. But what I'm saying is that it will take a few months to execute. I was just trying to expand on the above discussion and why his sales didn't make Tesla stock crash but selling out of the blue would.