Tesla said it had a gross vehicle margin of 32.9%, and most impressively, the electric vehicle maker also announced that its gross operating margin grew to 19.2%.
Not only has this refuted the old criticism that “Tesla can sell electric vehicles but can’t do it profitably” but it has also now shown that Teslas is the most profitable car of any major automaker and by a large margin.
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Given this surprising news, it was a head-scratcher when Tesla stock fell as much as 18% in the past two days. There have been many speculations that have been put forward to understand the Tesla accident.
The main theory was that short sellers were behind the crash. You see, on April 25, Elon Musk reached an agreement with Twitter’s board of directors to buy the social media platform. According to the deal, Musk will need to raise another $21 billion to make Twitter private.
Knowing this, it was speculated that short sellers started a big sale in Tesla in anticipation that Musk would raise the $21 billion he needed to make Twitter private by selling his Tesla stock.
The speculation was almost correct but with one huge caveat. Yes, someone was selling a lot of Tesla stock, but the person behind the sales is Tesla CEO himself, Elon Musk.
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According to a filing with the Securities and Exchange Commission, between April 26 and 27, Elon Musk sold 4.4 million shares of Tesla to raise $4 billion. Musk also confirmed that he sold Tesla shares on April 28, however, we are not yet able to find out the amount and may not do so until Monday, May 2.
This news finally determines why Tesla shares have fallen as much as 18% in the past few days. However, this is little consolation for some Tesla investors who have received margin calls since they took the leverage to buy Tesla.
However, on the bright side, Musk announced today that he has finished selling by writing on Twitter that he “has no more TSLA sales planned after today.” This should calm the nerves of Tesla investors who were startled by the sharp price swing.
No more TSLA sales planned anymore
– Elon Musk April 29, 2022
However, if you read Musk’s wording carefully, he said he had “no more planned sale of Tesla stock,” Musk certainly didn’t commit to stopping selling Tesla stock.
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Musk raised $4 billion from selling Tesla stock on April 26 and 27, we still don’t know how much he was able to raise on April 28, however, unless Musk sold $17 billion worth of Tesla stock on Thursday, there’s still Chance he may need to sell more shares to get another $21 billion he needs to buy Twitter.
Yes, Musk certainly doesn’t need to raise the entire $21 billion on his own and has said he plans to get as many as 2,000 investors to partner with him on his Twitter deal. And if some big names like Vanguard, which owns 10% of Twitter, agree to go in with Musk, the Tesla CEO certainly won’t need to sell more shares.
However, as the signatory to the deal, if Musk can’t persuade other investors to join him in the Twitter buyout deal, it is sad that he will have to sell more shares.
Having said that, we’re still happy to see Musk finished selling Tesla stock, at least even if that’s the case for now. We’ll make sure to keep you updated if the Tesla CEO has to sell more shares in the future. Until then be sure to visit our torquenews.com/Tesla site regularly for the latest updates.
What do you think? Surprised to learn that Elon Musk’s sale was the cause of Tesla’s stock price crash in the past few days? Also, do you think Musk will need to sell more of his Tesla stock to fund the Twitter acquisition? Let me know your thoughts in the comments below.
picture: Courtesy of Tesla
For more information see: Elon Musk places his new bet on the Tesla battery
Tinsae Aregay has been following Tesla and developing its EV space on a daily basis for several years. It covers everything about Tesla from cars to Elon Musk, energy work and autonomy. Follow Tinsae on Twitter at Tweet embed For daily Tesla news.