Tesla’s Elon Musk Sold Stock to Fund Twitter Deal. Here’s How Much.

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Now investors know one reason

Tesla

stock has been dropping—CEO Elon Musk had a lot of shares to sell.

Musk disclosed Tesla (ticker: TSLA) stock sales Thursday evening on Form 4s filed with the Securities and Exchange Commission.

A Form 4 is used to disclose selling by company management and other corporate insiders.

Musk sold 4.4 million shares worth of Tesla stock worth about $4 billion, presumably to fund part of his purchase of

Twitter

(TWTR). Musk sold his stock on April 26 and 27, according to the Form 4, which is typically filed within days of selling.

Musk’s $54.20 bid for Twitter was accepted by the social-media platform’s board earlier in the week. The entity formed by Musk to buy Twitter will be funded with about $25 billion in debt and $21 billion in equity. How Musk would fund the equity portion has been hotly debated by analysts and investors.

It turns out part of that amount was funded with the sale of Musk’s Tesla stock.

He said on Twitter on Thursday evening that he has no plans to sell anymore shares.

That might be a relief to Tesla investors. Potential Musk sales were an overhang for Tesla stock according to Wedbush analyst Dan Ives. Tesla stock has dropped about 12% since Musk’s bid was accepted. The

S&P 500
and

Nasdaq Composite
have dropped about 0.2% and 1% over the same span.

The $4 billion is far less than the total $21 billion equity portion listed in the Twitter merger documents. That could mean that some other sources will be involved in the deal in order to raise the remainder of the $21 billion in equity required for the purchase. The rest of the money could come from a combination of Musk’s cash on hand—from cryptocurrency gains or something else—existing Twitter shareholders that stay with Musk, or partners willing to invest along side Musk.

Tesla stock dropped 0.5% Thursday, closing at $877.51 after trading as low as $821.70. The stock was down 2.6% in after-hours trading at $854.50.

Musk still owns about 168 million shares of Tesla, not counting the 100-plus million stock options awarded as part of his 2018 compensation package.

Musk doesn’t like using brokers to organize secondary sales. He sold his stock in about 140 separate, smaller transactions. That isn’t the way large blocks of stock are typically sold, but it is how Musk sold stock back in 2021. Those sales had to do with options exercise and accelerating tax payments on unrealized capital gains.

Write to Al Root at allen.root@dowjones.com