Tesla (TSLA -2.76%) shares are ending a good week on a positive note. The stock was 1.1% higher as of 3:15 p.m. ET, bringing its weekly gain to more than 6.5%. While the overall market is also surging today, there's a good explanation for why Tesla shares would move higher today.
It was inevitable that Tesla would be caught up in the drama surrounding CEO Elon Musk's purchase of Twitter. After all, Musk had to sell Tesla shares to help fund the deal, but no one knew exactly how much he'd unload. Now that the deal for Twitter has been completed, that variable is off the table. Some long-term investors may not have wanted to be involved in that uncertainty, so it made sense to wait until today to buy Tesla stock.
Earlier this year, Musk sold more than 17 million Tesla shares worth more than $15 billion in hundreds of separate stock sales. There was also funding provided by banks and private equity to help fund the $44 billion deal. But analysts still had to guess as to how much, if any, more stock Musk would need to sell to raise cash needed to close the deal.
Since insiders can't typically sell company shares between the end of a quarter and the date the company files its quarterly reports, many were wondering if Musk would be selling this week. Tesla filed its third-quarter report with the Securities and Exchange Commission on Monday after announcing its earnings last week.
When an insider executes a transaction, he or she must file a Form 4, and there was no such form filed by Musk this week, meaning he must not have needed to sell any more shares. That could have been just what some investors were waiting to find out, and it opened the door for the stock to be bought without that overhang today.