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Tesla stock drops after another Musk share sale

Tesla (TSLA) slipped today following disclosure of another stock sale from CEO Elon Musk, with the shares now down nearly 49% year to date.

In a filing submitted with the SEC on Tuesday, Musk declared he sold around 19,500,000 shares over the course of three days in November, worth around $3.95 billion.

The latest sale comes only a few days after Musk closed his deal to buy Twitter on October 27, in a deal worth $44 billion.

It is unclear how much outside equity and personal money Musk has pledged for buying Twitter, though it is known $13 billion in debt financing was raised.

The latest Tesla sale from Musk this week follows two other disclosures that came after he announced his unsolicited bid to acquire Twitter on April 14.

On April 28, Musk declared in a filing that he sold around 9.7 million shares of Tesla worth around $8.35 billion. After Twitter sued Musk on July 12 to force him to complete the deal, Musk sold more shares on August 9, worth around $6.8 billion, claiming he needed to raise the funds in case he lost the lawsuit, and had to buy Twitter. Musk had previously said he wouldn’t sell any more Tesla shares.

For analysts and investors, the latest share sale is unwelcome news, since Musk’s deal to buy Twitter (and ensuing stock sales, as well as the threat of more stock sales) has been an overhang on the stock.

“Our fear heading into the final days of the deal was that Musk was going to be forced to sell more Tesla stock to fund the disaster Twitter deal and ultimately those fears came true which speaks to some of the massive selling pressures on the stock of late,” Wedbush’s Dan Ives said in a note published today.

Tesla’s stock performance has also been hit by factors like a potential slowdown in China, which Musk admitted may be in the middle of a slowdown, as well concerns over demand weakening in U.S., as well as larger macro concerns over the global economy. New competition from the likes of traditional automakers like Volkswagen, GM, and Ford threatens the strong EV lead Tesla has in the U.S. and Europe.

FILE – Elon Musk speaks at the SATELLITE Conference and Exhibition on March 9, 2020, in Washington. Twitter’s new owner and Tesla CEO Musk has sold nearly $4 billion worth of Tesla shares, according to regulatory filings. (AP Photo/Susan Walsh, File)

For Ives and investors, a focused Musk at the helm of Tesla is crucial right now during this uncertain time. Though Ives didn’t cut his rating or price target on Tesla, he was unequivocal in his displeasure, stating that the “Twitter madness needs to end now,” and Musk needs to focus more on Tesla, otherwise “investor frustration” would continue to build.

As for Musk’s Tesla holdings, according to his latest SEC filing he still owns over 445 million shares of Tesla, which is a 14% stake in the company. And although Musk is still the world’s richest person, his personal fortune has sunk to $179.5 billion from a high of $340 billion following Tesla’s stock decline, according to the Bloomberg Billionaires Index.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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