On Thursday, Tesla CEO Elon Musk announced he has completed his planned sales of Tesla stock and does not foresee selling any more for roughly two years. He added the severity of any economic downturn would influence his decision on any buyback.
In a Twitter Spaces chat, the billionaire CEO predicted the economy will experience a “serious recession” in 2023, and that will lower the demand for big ticket items.
He made his comments after a week which saw a sell-off of Tesla stock, as investors fretted over lagging demand for the electric vehicles as well as Musk’s stock sales, and his distractions as he tries to reorganize and promote his latest acquisition, the social media platform Twitter.
Muck said in the chat, “You certainly have my commitment I won’t sell stock until, I don’t know, probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter.”
Experts were quick to note, however that the tech mogul has previously sworn off any potential sale of stock, and then subsequently sold stock. Musk completed the sale of another $3.6 billion in stock, which brought his total sales since November of 2021 up to almost $40 billion.
Musk noted the board of Tesla is open to a buyback opportunity, but that it is dependent on how bad any upcoming economic period is.
On Thursday, share prices of Tesla fell 9% on news the automaker would offer massive, $7,500 discounts to US customers. Investors worried it was a sign that demand must be seriously lagging, amid the American economy’s slowdown.
Investors have been grumbling that the tech entrepreneur’s $44 billion takeover of Twitter has seriously harmed Tesla’s stock price, and may affect demand for the company’s vehicles. So far this year Tesla stock has fallen 60%.
Analysts had warned that Musk could be forced to sell more Tesla shares in order to finance his Twitter takeover. Despite initial reports that he would fund the takeover himself, he has since secured roughly $20 billion from other investors and banks.
Amid the process of reorganizing the platform, Musk has courted controversy, from his laxening of moderation standards, to his mass firings of staff, to the subsequent gender breakdowns of the remaining workers, to his revelations of government collusion on censorship of issues and users. Some feel that the relatively politically left-leaning customers who made up much of Tesla’s base may now migrate away from the automaker in response.
Earlier in the week, following a poll which said users wanted him to step down as CEO of the company, Musk announced he will step down as CEO of Twitter, as soon as he finds, “someone foolish enough to take the job.” He further indicated he intends to stay on and run the tech side of the company.
It is unclear how aggressively he is searching for a candidate to replace him as CEO however, and there is no timetable as to when he may find a replacement.
