Tesla CEO Elon Musk sells nearly $7 billion worth of shares
Anxious to secure his back in his legal battle with the uncertain outcome with Twitter, Elon Musk sold in early August for nearly $ 7 billion in shares of his Tesla automotive group.
According to a document filed with the SEC, the American stock market policeman and published Tuesday evening, the multibillionaire offloaded approximately 7.9 million Tesla shares between August 5 and 9.
In a tweet published overnight from Tuesday to Wednesday, he explained that he wanted to “avoid an emergency sale of Tesla securities”, in the scenario – which he hopes is “improbable” -, where he would be forced to buy Twitter and would lose the support of some of its financial partners.
In April, he had already sold some $8.5 billion worth of shares in his automotive group to prepare for the acquisition of the social network.
At the time, Elon Musk had however assured that there would be no other sales of Tesla titles.
With now more than 15 billion dollars in his pocket from these sales of stakes, the fiery entrepreneur, in the midst of a legal tussle over the broken promise of his takeover of Twitter, could prepare either to pay compensation, or ultimately finance the takeover, analysts said.
“Musk may try to resolve this explosive situation before the October trial date (…) with a massive out-of-court settlement,” suggested Dan Ives of Wedbush Securities.
The analyst believed that the chances of an agreement with Twitter possibly involving a payment “ranging from 5 to 10 billion dollars” were “now more likely”.
Tesla shares rose 2.50% to $871.25 around 12 p.m. That of Twitter climbed 3.56% to 44.35 dollars.
On Saturday, Elon Musk had challenged the boss of Twitter to publicly debate and prove the share of false accounts on the social network, a point of disagreement put forward by the multi-billionaire to withdraw his purchase offer.
Elon Musk signed a $44 billion deal in April to buy Twitter, before unilaterally breaking it off in early July.
The boss of Tesla believes that Twitter lied about the proportion of automated accounts and spam on its platform, and even claims that the network “fraud”, by deliberately increasing the number of monetizable accounts.
The multi-billionaire asked Twitter’s chief executive, Parag Agrawal, to “publicly debate the percentage of fake accounts” and “prove to the public that Twitter has less than 5% fake or unwanted daily users.”
The legal battle has been launched: a trial is due to open on October 17 before the Delaware Court of Chancery, a court specializing in business law, and last five days.
As soon as the takeover agreement was broken, Twitter sued the richest man on the planet to force him to honor his promise. Elon Musk counterattacked, with a complaint in which he asks the court to release him from the agreement and order Twitter to pay him damages.
The chances that he will get out of it by paying only the indemnities for breaking the agreement (one billion dollars), or that he will be declared in his right, are considered very low by the experts.
Twitter shareholders must meet on September 13 to authorize or not this acquisition by Elon Musk, which would represent a substantial added value for shareholders.
The Tesla boss initially pledged to offer $54.20 per Twitter share.
Between the general decline in the stock market in recent months, which of advertising revenue from social networks linked to the economic situation and public criticism from Elon Musk, the title of Twitter had collapsed to around 32 dollars on July 11.
The maker of electric vehicles for its part published solid results in the second quarter at the end of July, with a profit of 2.3 billion dollars, almost twice as much as in the same period last year.
At the general meeting of shareholders on Thursday, which voted to divide the group’s securities by three on August 25 to make the action more accessible to small holders, Elon Musk had assured that the group was thinking of a buyback program of actions. The next day, he began to sell his own titles… “It doesn’t look very good for Musk”, commented Dan Ives.
