Elon Musk may sell Tesla stock to prop up dying Twitter

From Futurism/The Byte

Masterplan

Usually, telling advertisers to "go fuck themselves" isn't a winning strategy if you're running a social media site that depends on ad revenue.

And X-formerly-Twitter owner Elon Musk is learning this the hard way.

Or if he isn't already, he's about to. Because, as he's suing those advertisers for not buying ads on Twitter — which is exactly what he told them to do — the company is entering some of its worst financial straits yet: in the second quarter, it only made $114 million in revenue in the US, according to internal figures obtained by The New York Times — a 53 percent drop from the same quarter last year.

Now, as Fortune reports, this is so dire that even longtime Tesla investors predict that Musk might have to sell some of his own shares in the automaker to prop up his failing website.

"I would be expecting something between $1 and $2 billion in stock," said Bradford Ferguson, president and chief investment officer of asset manager Halter Ferguson Financial in a YouTube comment on Wednesday, as quoted by Fortune, noting that this could cause the stock to lose between five to ten percent of its value.

"It's a massive hole they need to plug," he added.

Bail-Out Button

It's a last-ditch option that Musk has already resorted to in the past.

In 2022, after a disastrous several months that followed his takeover of Twitter that fall, Musk sold over $7.5 billion in Tesla stock between November and December. He said he "definitely" wouldn't sell anymore for at least another 18-24 months after that, or "probably" not until 2025.

But he also made a similar promise earlier that year in April, after selling about $7 billion worth of his shares in the automaker to fund his Twitter deal.

The point being: Musk is willing to dupe his own investors to dig himself out of a huge financial hole — a hole that, according to Fortune, is looking like an astounding 84 percent decline in revenue from the second quarter of 2022, before he bought out Twitter and took it private.

And it's not just the advertising crisis contributing to the site's decline. The number of active daily users is down by around 23 percent, according to an analysis released in March.

Keep On Sellin'

With all that in mind, Musk will have to see the writing on the wall at some point, and that means he may fall back on selling stock yet again.

"The bleeding of X will continue and at some point Elon will have to sell more Tesla shares to plug the $1-2 billion per year hole at X," tweeted Gary Black, managing partner of Future Fund and an investor in the automaker.

Ferguson argues that Musk may need the money to stay within the terms of his loan agreement for the $13 billion debt Twitter took on as part of his scheme to buy the platform.

However Musk decides to worm himself out of this one, Twitter's current trajectory on the business end of things looks far from sustainable, and it seems like it's just a matter of time before its owner's reckless decision-making comes home to roost.

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