Elon Musk says he will not sell Tesla shares for two years

Disclosure comes after billionaire offloaded stock worth about $40bn this year, mostly to fund his $44bn purchase of Twitter

Elon Musk with a Tesla model. The electric car maker has faced a difficult end to the year and has cut prices. Reuters
Beta V.1.0 - Powered by automated translation

Tesla chief executive Elon Musk has said he will not sell any more Tesla shares for about two years.

While speaking in a Twitter Spaces audio chat, Mr Musk said he foresaw that the economy would be in a “serious recession” in 2023, with demand for big-ticket items expected to be lower.

His comments came after a Tesla stock sell-off deepened on Thursday over worries about softening demand for electric cars and Mr Musk's distraction with Twitter and his stock sales.

“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,” Mr Musk said.

Tesla's shares rose by 3 per cent to $129.23 in after-hours trading on Thursday following an 8.9 per cent drop in regular trading hours.

Mr Musk has previously made promises about not selling Tesla stock before subsequently selling it.

Last week, he disclosed another $3.6 billion in sales of shares, taking his total close to $40 billion since late last year and frustrating investors as the company's shares wallow at more than two-year lows.

“I needed to sell some stock to make sure, like, there's powder dry … to account for a worst-case scenario,” the billionaire said.

He said Tesla's board was open to share buybacks, but that would depend on the scale of a recession.

On Thursday, Tesla shares plunged 9 per cent after the electric car maker started to offer deep, $7,500 discounts to US consumers, stoking investor concerns about softening demand as the economy slows.

“I think there is going to be some macro drama that is higher than people currently think,” he said.

He expects homes and cars to be “disproportionately” affected by economic conditions.

Meanwhile, Tesla is close to picking the location of its new “gigafactory”, Mr Musk said.

The car maker could announce the construction of the “gigafactory” in the northern Mexican state of Nuevo Leon as soon as Friday, with an initial investment of between $800 million and $1 billion, local newspaper Reforma reported on Monday.

Asked whether he would bring in someone such as venture capitalist David Sacks to run Twitter to allow him to focus on Tesla, Musk dodged the question and said Twitter was a relatively simple business.

“[Twitter] is maybe 10 per cent of the complexity of Tesla,” Musk said.

Mr Musk said earlier this week that he would step down as chief executive of microblogging platform once he finds “someone foolish enough to take the job”.

He has increasingly used Twitter's live audio platform to weigh in on his product and strategic decisions at the social media company he took private in October in a $44 billion deal.

Updated: December 23, 2022, 5:05 AM
EDITOR'S PICKS
NEWSLETTERS