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Elon Musk sells $6.88 billion worth of Tesla shares

Yahoo Finance Live anchors discuss reports that Elon Musk has sold $6.88 billion worth of Tesla shares.

Video Transcript

[MUSIC PLAYING]

JULIE HYMAN: I took a look at Tesla and Twitter this morning. Both of them are trading higher following news that Elon Musk sold $6.9 billion worth of Tesla shares. It's according to a series of SEC filings that were published on Tuesday. The sale happened the day immediately following Tesla's annual shareholder meeting on August 4.

In a tweet addressing the sale, Musk said, he's done selling. This is due to the possibility of Twitter forcing him to follow through with the buy. He didn't want to do what he was calling an emergency sale or a fire sale, perhaps, of the shares.

So we're talking about 7.92 million shares being sold on August 5. One little irony here, as one analyst pointed out, is that he said at the shareholder meeting the day before, that any weakness in the stock was a buying opportunity. Well, guess not. And the shares, by the way, were down 6.6% on Friday. Now, we know why.

BRAD SMITH: He still owns 155--

JULIE HYMAN: Yes.

BRAD SMITH: --million Tesla shares, worth about $131 billion. So you do the math on the market cap of Tesla. That's about 15% of Tesla that he's still comfortably holding on to, even with this sale.

BRIAN SOZZI: Yeah, I think he's gonna make it through here, guys. But the read through, of course, is what it means for Twitter.

JULIE HYMAN: Yes.

BRIAN SOZZI: Like we've just been discussing, Dan Ives over at Wedbush saying in a note, "The chances of a Twitter deal now more likely," in his opinion, raising his price target on Twitter to $50 from $30. So I think-- I'm surprised that Twitter ticker is not popping on the Yahoo Finance platform. But still, it now-- the Street is taking this as a clear sign that maybe he does want to get this deal done.

JULIE HYMAN: Well--

BRIAN SOZZI: Or is forced to get it done.

JULIE HYMAN: Right. Or it's sort of an admission that it's possible he will lose in court, which is kind of an interesting position for him to take. Maybe an acknowledgment that his case is not ironclad when it comes to Twitter, right?

BRIAN SOZZI: Shocker.

JULIE HYMAN: Which is kind of interesting here. He also said, by the way, again, he's not gonna sell any more shares. But he said four months ago he wasn't gonna sell any more shares. I mean, yes, the circumstances have changed, if indeed he has to buy Twitter. But nonetheless, I don't know how much credibility he has when he says he's not gonna sell any more shares.

BRAD SMITH: He also did it in December as well.

JULIE HYMAN: Yeah.

BRAD SMITH: And so this just continues--

JULIE HYMAN: He did that for-- what was it, tax purposes--

BRAD SMITH: Tax--

JULIE HYMAN: --or something?

BRAD SMITH: --purposes [? again. ?] Yeah, because you put the poll out there. And so I guess you got to follow through on that. But I mean, at the same day, it's Elon Musk continuing to just be Elon Musk at this point. And in this case, have to actually-- or at least some omission here that he may actually have to go through with this acquisition and consummate the deal between himself, and X Holdings and Twitter.

BRIAN SOZZI: Well, I'm sure this just-- the Tesla Bulls have to like this because this ultimately means maybe Musk doesn't have to force-- or isn't forced to sell Tesla shares last minute at a fire sale price should he have to get this deal done.

JULIE HYMAN: I mean, Tesla Bulls will find a reason to like this. I don't know what would be good about this necessarily for Tesla. I mean, yes, that is one good thing about it. But if he's forced to buy Twitter, he's still gonna be distracted by this whole Twitter situation. I would imagine if you're a Tesla shareholder at this point, you just want that over and done with.

And if he's forced to buy Twitter, it's not over and done with. He's got to run the company or figure out somebody else to run the company, right? So you know, that seems to me to be an overhang, I would think, for those Tesla shares as well.