Elon Musk sold $6.9 billion worth of shares in Tesla Inc., the biggest sale ever for the billionaire, and said he wanted to avoid a last-minute sell-off of the electric car maker’s shares in case he was forced out to continue with its aborted deal to buy Twitter Inc.
Tesla’s chief executive officer sold about 7.92 million shares on Aug. 5, according to a series of registration filings filed Tuesday after U.S. markets closed.
As speculation about the reason for the sale mounted, Musk responded in a series of late-night tweets, saying he wanted to avoid an emergency stock sale if he were forced to complete the $44 billion acquisition of Twitter, where he had been forced to take over. ran from last month. .
When asked by followers if he was done selling Tesla stock and would buy the stock again if the deal doesn’t close, Musk replied, “Yes.”
Yes.
In the (hopefully unlikely) event that Twitter forces this deal *and* some stock partners fail, it’s important to avoid an emergency sale of Tesla stock.
— Elon Musk (@elonmusk) August 10, 2022
The sale comes just four months after Musk, the world’s richest person, said he had no further plans to sell stock in the automaker he built into a global power after selling $8.5 billion worth of stock in the car. aftermath of his first offer to buy Twitter.
Since then, Tesla shares have recovered from the lows reached in May, benefiting from broader gains in US equities.
“He definitely makes it clear that he makes money for Twitter,” said Charu Chanana, a strategist at Saxo Capital Markets Pte in Singapore.
“The timing of the sale — just before the US CPI release — says something. The bear market rally has begun to falter, and further price adjustments to Fed expectations could lead to more pain for future stocks, especially in technology.”
Musk can keep selling Tesla, with or without Twitter: MLIV Pulse
Tesla shares are up about 35% from this year’s lows, but are still down about 20% this year.
Tesla’s market fortunes have been linked to those of the Twitter deal since Musk made his surprise overture earlier this year.
The billionaire said last month that he was canceling the agreement to buy the social network where he has more than 102 million followers and keeping it private, alleging that Twitter has made “misleading representations” about the number of spam bots on the service.
Twitter has since filed suit to force Musk to complete the deal, and a trial in the Delaware Chancery Court is scheduled for October.
In May, Musk dropped plans to partially fund the purchase with a margin loan tied to his Tesla stake and increased the size of the equity component to $33.5 billion.
He had previously announced that he had secured $7.1 billion in equity pledges from investors including billionaire Larry Ellison, Sequoia Capital and Binance.
In his tweets late Tuesday, Musk said the stock sale was also unforeseen if those private investors don’t come through.
Over the weekend, Musk tweeted that if Twitter provided his method of sampling accounts to determine the number of bots and how they’re confirmed as genuine, “the deal should go under its original terms.”
Good summary of the problem.
If Twitter simply gives their method of sampling 100 accounts and how they are confirmed to be genuine, the deal should be on the original terms.
However, if their SEC filings are found to be materially inaccurate, then they shouldn’t.
— Elon Musk (@elonmusk) August 6, 2022
The Twitter deal included a stipulation that if it fell apart, the party breaking the deal would pay a $1 billion termination fee under certain circumstances.
Legal experts have debated whether the conflict over spam bots is enough to make Musk walk away from the deal.
Musk, 51, has sold about $32 billion worth of shares in Tesla in the past 10 months.
The divestments began in November after he polled Twitter users about whether to cut his share of the platform, kicking off the rollercoaster ride that has stunned even the most seasoned of Musk watchers. He now owns 14.84% of Tesla, which makes him still by far the largest stakeholder.
Gene Munster, managing partner of Loup Ventures, said in a response to Musk’s tweets clarifying the reason for the sale that he estimated the 75% chance the tycoon would buy Twitter.
“I’m shocked,” Munster said. “This will be a headwind for Tesla in the short term. In the long run, deliveries and gross margin are all that matters.”
Musk’s net worth of $250.2 billion is the world’s largest, according to the Bloomberg Billionaires Index, but his net worth has fallen by about $20 billion this year as Tesla shares fell.
The automaker’s shareholders approved a three-for-one stock split last week, a move designed to attract an even larger number of retail investors given the stock’s recent rebound.
Tesla’s better-than-expected second-quarter results were a headwind, along with groundbreaking US climate change legislation that aims to boost clean energy use through a range of tax breaks.
–With help from Dana Hull and Ishika Mookerjee.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)