Elon Musk Offloads $300M in xAI Shares—Secondary Market Braces for Impact

Another day, another nine-figure liquidity event in the tech oligarchy’s never-ending game of financial musical chairs.

Musk’s latest move—dumping $300M worth of xAI stock via secondary offering—reeks of either strategic genius or another ’sell the news’ gambit. Either way, Wall Street’s high-frequency traders are already salivating over the volatility buffet.

Remember kids: when insiders sell, they’re either diversifying or bailing. But hey—at least this time it’s not Dogecoin.

Musk to sell $300 million in xAI stock through secondary offering

Along with Monday’s xAI debt offering, Musk raised $650 million for his neurotechnology firm, Neuralink Corp. According to the Financial Times, he is also selling $300 million of xAI shares in a secondary stock sale.

The person, who asked not to be identified because the details are private, said the debt deal consists of three parts. A term loan B, a fixed-rate term loan, and senior secured notes. Proceeds are meant for general corporate needs, with commitments required by June 17.

Musk recently merged xAI with his social-network platform X under a single umbrella called XAI Holdings.

He has poured money into building out the Memphis data center, known as Colossus, and the debt sale could help pay for it. That facility already operates 200,000 graphics processing units (GPUs) to train its AI models, and Musk told CNBC on May 20 that he plans to add another 1 million GPUs at a nearby site.

Earlier reports from Bloomberg said xAI was in conversations to raise roughly $20 billion from investors, highlighting strong interest in artificial intelligence and reflecting Musk’s influence in both business and politics.

Morgan Stanley and Musk go back several years

Morgan Stanley advised Musk on his acquisition of X, then called Twitter Inc., in 2022 and led a group of lenders that provided debt financing for the $44 billion deal.

Those lenders planned to immediately sell the loans to investors, but concerns about Twitter’s business and some of Musk’s unpredictable choices left banks holding about $13 billion of risky debt for more than two years.

This year, Morgan Stanley relaunched the sale process and finally sold the remaining debt in April, as Optimism about Musk’s business prospects grew.

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