Days after engineering a deal to buy Twitter, the world’s richest man Elon Musk has shared business advice on buying and selling shares. Musk wrote, “Since I’ve been asked a lot: Buy stock in multiple companies that make products and services that you *trust*. Sell only when you think their products and services are doing poorly. “
The Tesla CEO tweeted to his 89 million followers on Twitter, “Don’t panic when this happens in the market. It will serve you well in the long run. (sic).”
Musk has sold about $8.5 billion worth of shares in Tesla to help fund the buyout.
Musk reported the sale of 9.6 million shares in filings with the Securities and Exchange Commission on Thursday and Friday. Trades were made at prices of $822.68 to $999.13 per share.
Tesla’s CEO, the world’s richest man, tweeted on Thursday night that he had no plans to sell any further shares of the company.
Kevin Kaiser, a finance professor at the Wharton School at the University of Pennsylvania, said Musk’s share sale means it’s more likely that the Twitter deal will close because it indicates that Musk intends to come up with the money.
San Francisco-based Twitter announced Monday that it has agreed to be bought by Musk for $54.20 per share, or about $44 billion. Analysts said the deal could upset Tesla investors that Musk would be distracted from Twitter and less busy running the electric car company — and would have to sell off a large number of Tesla shares to finance the acquisition. Musk is the largest shareholder of Tesla.
On Tuesday, Tesla shares closed down 12%, the biggest single-day drop since Sept. 8, 2020. On Friday, shares of Tesla Inc., which is based in Austin, Texas, were going for about $884.
Kaiser said the sale of shares now, when the deal is expected to close, is a “prudent” move by Musk.
“It makes sense to sell shares before people expect this to happen so as not to put unusual short-term pressure on their selling price,” Kaiser said.
Before Musk’s deal for Twitter is completed, shareholders need to pay attention. Similarly, there will be regulators in the US and the countries where Twitter does business.
So far though, some roadblocks are expected, despite objections from some Twitter employees and users who worry about Musk’s stance on free speech and what it could mean for harassment and hate speech on the platform. .
with agency input