In five separate Form 4 filings to the SEC published on Thursday, Musk revealed he has already unloaded a combined total of 4.41 million shares on Tuesday and Wednesday, collectively worth about $4 billion. 

“No further Tesla sales planned after today,” he later posted to Twitter.

While Musk’s statement should ease investor worries about a future stock overhang, it also suggests there may be more Form 4s still to come. By law they are required to be filed within two business days following the transaction date.

The stake sale disappointed some Tesla bulls who had hoped Musk would find alternative methods to finance a deal viewed as an expensive and distracting vanity project that only the world’s richest human could possibly afford. 

Others were less surprised, pointing to the suspicious surge in daily trading volumes and the 12.7% decline in the stock so far this week. Some 45.4 million shares changed hands on Tuesday and another 41.2 million on Thursday, only the sixth and seventh time this year that the 40 million mark was cracked. Typically volumes are about half that figure.

The Tesla CEO still owns some 168.2 million shares in his company, but a large chunk of that has already been pledged as security for loans and cannot be easily sold. 

Loans and collateral

Prior to the Twitter bid, the company’s proxy statement from last year showed Musk had already borrowed against 88.3 million shares as part of a tax-efficient scheme to finance his lifestyle.

More recently, his stock has served as collateral for $25.5 billion in debt he raised for the Twitter purchase, and there’s reason to suggest he cannot pledge much more. 

That’s because Tesla’s board limits the value directors and executive officers can borrow against their holdings in order to guard against any forced liquidation of shares that might embolden short-sellers.

Speculators have therefore estimated that as many as 150 million of Musk’s shares, excluding vested stock options, could now effectively be frozen, which may explain why Musk said he’s through selling.

The Tesla CEO has marketed his $44 billion takeover as a bid to restore freedom of speech rather than citing any economic rationale as motive. Twitter famously banned Donald Trump for inciting violence following the Jan. 6 attack on the Capitol by his supporters, and Republican politicians have pressed Musk to reinstate Trump after the takeover. 

Musk has become increasingly critical of what he calls the “woke mind virus” and claimed on Thursday the Democrats have been “hijacked by extremists.” His growing political estrangement from Democrats follows repeated attacks against the centibillionaire by leading members of the party, who have sought to paint Musk as a freeloader who evades paying income tax.

The serial entrepreneur, however, does not need to pay income tax because he has asked Tesla’s board not to pay him a salary. Instead, Musk receives stock-based compensation conditional upon meeting milestone goals, with the bulk of his wealth tied up in risk assets like Tesla.