Elon Musk Sells $6.9 Billion of Tesla Stock, Leaving Investors to Wonder What’s Next

Over the past few days, Elon Musk has sold about 8 million shares of Tesla worth almost $7 billion.


AFP via Getty Images

Elon Musk, the enigmatic, impenetrable CEO of



Tesla
,

is at it again. He sold billions worth of shares in his electric-vehicle company over the past three trading days. That will leave investors wondering why and, more importantly, what comes next.

Musk disclosed sales Tuesday evening of almost 8 million shares worth about $6.9 billion. The average selling price was about $869 a share. The sales were conducted over three days in more than 120 separate transactions.

After all the selling, Musk holds about 155 million shares of



Tesla

(ticker: TSLA). That excludes unexercised management stock options that are available to Musk.

The move is sure to surprise investors. In April, Musk sold Tesla shares worth about $8.5 billion, presumably to fund part of his purchase of social media platform



Twitter

(TWTR). Musk tweeted after that sale: “No future TSLA sales planned after today.”

That was, of course, months ago. Since agreeing to purchase



Twitter
,

Musk has backed away from the deal and has tried to terminate the acquisition. Twitter is trying to enforce the purchase contract in a Delaware court.

The Tesla stock sale could be an indication that Musk and Twitter are close to a negotiated settlement. Musk also could just be preparing for possible outcomes from his legal battle with Twitter. Or Musk might be selling for another reason.

It’s hard to know exactly what’s going on. Twitter and Tesla didn’t immediately respond to requests for comment.

Whatever the reason, the sales will unnerve shareholders, who don’t like to see large blocks of stock go on sale. They also don’t like to see management selling. Musk, of course, still has billions worth of Tesla stock.

One thing the selling disclosure does is help investors interpret recent Tesla trading.

Tesla stock dropped 6.6% on Friday, while the


S&P 500

dropped 0.2%. Preliminary reports that Tesla delivered about 30,000 vehicles from its Shanghai plant in July may have weighed a little on shares. But Musk also sold about 3.3 million Tesla shares that day.

Tesla delivered about 28,000 vehicles from its Shanghai plant in July, according to the Chinese Passenger Car Association. That was down from a record 78,906 delivered in June. Tesla took some planned downtime to change out tooling during the month.

Tesla shares rose 0.8% Monday after the Senate passed the Inflation Reduction Act over the weekend. The potential law includes tax credits for EV purchases. Tesla also set the date for its 3-for1 stock split on Friday evening after the close of trading. The split will happen Aug. 25, and the announcement was another factor that influenced stock trading on Monday. Musk sold about 1.6 million shares that day.

On Tuesday, Tesla stock dropped 2.4%, while the S&P 500 fell 0.4%. Musk sold another 3 million shares Tuesday.

Overall, about 100 million Tesla shares traded over the past three sessions. That’s roughly 25% higher than average recent trading volume. Musk’s sales represented about 8% of total volume over the three-day span or about one-third of the increased volume.

Musk was a significant portion of the volume increase. Higher-than-average volume typically accompanies bigger-than-average stock price moves — up or down.

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

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