Eager to secure his back in his legal battle with the uncertain outcome with Twitter, Elon Musk sold nearly $7 billion worth of shares in his car group Tesla in early August.
• Read also: Elon Musk challenges Twitter to test the proportion of fake accounts
• Read also: Elon Musk accuses Twitter of misleading him, the network denies it
• Read also: Twitter’s lawsuit against Elon Musk will begin on October 17
According to a document filed with the SEC, the US stock market police and published late Tuesday, the billionaire unloaded approximately 7.9 million shares of Tesla between August 5 and 9.
In a tweet posted overnight from Tuesday to Wednesday, he explained that he wanted to “avoid an emergency sale of Tesla stock” in the scenario – which he hopes is “unlikely” – in which he would be forced to buy Twitter and lose. the support of some of its financial partners.
In April, he had already sold shares in his car group worth about $8.5 billion to prepare for the takeover of the social network.
However, at the time, Elon Musk had assured that there would be no further sales of Tesla securities.
With more than $15 billion now in his pocket from these stake sales, the cutthroat businessman, in the midst of a legal fight over the broken promise of his Twitter takeover, could prepare to pay compensation or, ultimately, finance the acquisition. 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 believes that the chances of a deal with Twitter possibly involving a payment “ranging between 5,000 and 10,000 million dollars” are “now more likely”.
Shares of Tesla rose 2.50% to $871.25 around 12 pm Shares of Twitter rose 3.56% to $44.35.
On Saturday, Elon Musk had challenged the Twitter boss to publicly debate and prove the participation of false accounts in the social network, a point of disagreement raised by the billionaire to withdraw his purchase offer.
Elon Musk signed a $44 billion deal in April to buy Twitter, before unilaterally breaking it in early July.
The Tesla boss believes that Twitter lied about the proportion of automated and spam accounts on its platform, and even claims that the network “frauds”, by deliberately increasing the number of monetizable accounts.
The billionaire asked Twitter CEO Parag Agrawal to “publicly discuss the percentage of fake accounts” and “prove to the public that Twitter has less than 5% of fake or unwanted daily users.”
The legal battle has been launched: a trial is scheduled to open on October 17 before the Delaware Court of Chancery, a court specializing in commercial law, and will last five days.
As soon as the takeover deal fell apart, Twitter sued the richest man on the planet to force him to keep his promise. Elon Musk counterattacked, with a complaint in which he asks the justice to release him from the agreement and order Twitter to pay him damages.
The chances that he will come out paying only the compensation for breaking the agreement (one billion dollars), or that he will be declared in his right, are considered very low by experts.
Twitter shareholders are due to meet on September 13 to authorize or not this acquisition by Elon Musk, which would add substantial value to shareholders.
The Tesla boss initially promised to offer $54.20 per Twitter share.
Between the general decline in the stock market in recent months, that of advertising revenue from social networks linked to the economic situation and public criticism of Elon Musk, the stock of Twitter had plummeted to around $32 on July 11 .
The electric vehicle maker for its part posted strong second-quarter results at the end of July, posting a profit of $2.3 billion, nearly double the same period last year.
At the general meeting of shareholders on Thursday, in which they voted to divide the group’s securities in three on August 25 to make the action more accessible to small owners, Elon Musk had assured that the group was thinking of a buyback program. of actions. The next day, he started selling his own titles… “It doesn’t look too good for Musk,” Dan Ives commented.
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