Giant for electric vehicles Tesla Inc TSLA reported third quarter financial results this week. Given the gains in the rear-view mirror, the stock could face near-term pressure as a new trading window opens for the CEO Elon Musk.
What happened: A deal for Musk Acquire social media platform Twitter Inc TWTR is back at the starting line with an outstanding price tag of $44 billion. To fund the deal, Musk has found several backers and previously also sold part of his stake in Tesla to raise the necessary funds.
Musk wasn’t allowed to sell any shares in Tesla between the end of the third quarter and the company’s announcement of earnings. Now that he’s past that, there’s likely a window open to sell shares to fund the Twitter deal.
“$TSLA trading window likely to reopen on Friday”, The Future Fund Managing Partner Gary Black said. “Since Elon sold hard last night, I continue to expect Elon to sell around $5 billion worth of Tesla stock to complete the Twitter deal by next Friday.”
Black before estimated that Musk still needed $5.4 billion to fund the deal, which likely came from selling Tesla stock.
One idea discarded by Black was a potential Tesla share buyback.
“We asked a securities attorney if $TSLA could approve and announce a multi-year $10 billion share repurchase and then use $5 billion to immediately buy back shares from Elon Musk.”
Black said the answer appeared to be yes.
During his conference call, Musk said Tesla may consider a share buyback, one of several things considered positive for the company going forward.
Some observers said Musk over-promoted Tesla as a company during the conference call ahead of a potential stock sale.
“Wow, I’ve never heard of Elon Tesla pumping that hard,” writes the Tesla blogger Sawyer Merritt tweeted.
Tesla announced it would begin deliveries of the Tesla Semi in December. Musk also shared more details about a $25,000 robotic taxi that is believed to be an important catalyst for the future. The Tesla CEO also said that Tesla might be worth it more than Apple…
