Tesla CEO Elon Musk has sold nearly $7 billion worth of Tesla stock amid fears that a lawsuit against him over its $44 billion takeover of Twitter will be settled. Musk attempted to back out of his proposed purchase of the social media company due to an alleged misrepresentation of the number of bots on the site. Twitter claims bots are around 5%, but Musk estimates it’s closer to 20%. Musk’s sale is intended to provide enough liquid capital in case a sale is forced and the equity partners fail to meet their end of the deal. This would force the entrepreneur to sell Tesla stock at a potentially lower price, causing investor panic. This comes as Tesla looks set to split its shares 3-1 later this month, making for more affordable stock ownership. Some have argued the whole Twitter ordeal was a means for Musk to sell Tesla stock without panicking investors. More in This article from The Wall Street Journal. – Ross Sinclair
Elon Musk is selling nearly $7 billion in Tesla stock amid uncertainty on Twitter
The billionaire suggested the share sale was aimed at avoiding a fatal sell-off if he was forced to buy the social media company
Rebecca Elliott
Elon Musk has sold nearly $7 billion worth of Tesla stock in recent days, regulatory filings show, amid uncertainty over the fate of his $44 billion deal to buy Twitter Inc.
Mr. Musk, Tesla’s chief executive and largest shareholder, sold about 7.9 million shares between Friday and Tuesday, filings show, leaving him with a 15% stake in the company.
The Tesla chief has been on a sales spree over the past year, during which he cashed in about $32 billion worth of the electric car maker’s stock. That includes about $8.5 billion in sales in April while Mr. Musk was raising financing to take over Twitter. at the time he wrote on Twitter: “There are no TSLA sales planned after today.”
Neither Tesla nor Mr. Musk responded to a request for comment.
Since then, Mr Musk has tried to back out of buying Twitter, which is suing him to force a takeover. The case will go to court in October.
If a judge had forced Mr. Musk to complete the deal, he could have received more than $33 billion in equity financing, according to a regulatory filing. He already owns more than 9% of Twitter, which is valued at about $4 billion at $54.20 a share, Mr. Musk’s buyout price.
Asked on Twitter whether he had finished selling shares, Mr Musk said: “Yes.” (In April, it also said it had no plans for additional sales.)
He added on Tuesday: “In the (hopefully unlikely) event Twitter is forcing this deal to close and some equity partners do not come through, it is important to avoid an emergency sale of Tesla stock.”
If the Twitter deal doesn’t go through, Mr. Musk will buy Tesla stock again, he said. He also suggested he might create his own social media platform, X.com, if the deal falls through. He said before agreeing to buy Twitter that he had “seriously thought” about the venture.
Mr. Musk, whose fortune is about $250 billion, according to the Bloomberg Billionaires Index, is compensated in the form of stock and does not take a salary from Tesla.
For a long time, he did not want to sell shares in the company, which could weaken his control. Most of last year’s sales were intended to cover tax liabilities associated with the exercise of stock options.
Last week, Tesla shareholders cleared the way for a 3-for-1 stock split that the company says is designed to make ownership more affordable for employees and individual investors.
The split is set to take effect Aug. 25 for shareholders of record Aug. 17, the company said last week.
Write Rebecca Elliott y [email protected]
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