Elon Musk sells $7 billion Tesla shares, but why?
Elon Musk, the CEO of Tesla, sold about $7 billion worth of the company’s shares to get his finances in order in case he has to complete his $44 billion deal to acquire Twitter.
According to regulatory filings, Elon Musk sold nearly 7.92 million stocks during the last three days of trading. He still owns nearly 15% of Tesla and reported that he has done with selling and willing to buy Tesla stocks if the Twitter deal does not close.
He yesterday tweeted that ” the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t’ come through, it is important to avoid an emergency sale of Tesla stock.” So far, he is the largest individual shareholder of Tesla.
Tesla stock rose 4% to $883.07 on Wednesday (August 10). While Twitter Inc. shares rose 3.7% to close at $44.43, up 36% since July 11, with most analysts believe Musk has a small chance of winning in court.
Elon Musk and Twitter
Elon Musk signed the contract in April to buy this social media company. However, he announced his intention to withdraw months later.
Last week, Musk countersued Twitter accusing the company of fraud over his acquisition. He claimed that Twitter withheld important information and misled Musk’s team about its user base size.
He stated that it’s due to his worries about how the company accounted for fake users. His hesitation co-occurred with a profound decrease in shares of technology companies, including Tesla. Twitter is accused of violating a securities law, fraud, and breach of contract in Texas, where Musk lives.
Musk said in the spring that he had no plans to sell his Tesla stock. He had long hesitated to sell company stock for fear of losing control. Wedbush industry analyst Dan Ives stated that “the situation has dramatically changed.” However, Musk is trying to resolve this power keg situation before the deal officially heads to court in October.
Musk’s legal team also filed a motion under seal requesting the judge to ask Twitter to give additional information. Musk said he would repurchase Tesla stock if the Twitter deal didn’t close. Also, if the deal falls through, he said he might launch his own social media platform, which he has been giving serious thought on this plan.
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