The Twitter saga: Elon Musk sells more shares, worth $6.9 billion, in Tesla
Virendra Pandit
New Delhi: Why is the world’s richest man, with a net worth of over USD 250 billion, offloading the stake in his own company, even after denial?
Is there a method to the most high-profile case in the global corporate world?
On Wednesday, the media reported Tesla Inc. Chief Executive Officer Elon Musk sold yet another USD 6.9 billion worth of shares in the electric vehicle maker, saying the funds could finance a potential Twitter deal if he loses a legal battle with the giant microblogging platform.
The latest sales bring total Tesla stock sales by Musk, 51, to about USD 32 billion in the last ten months.
“In 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,” he tweeted late on Tuesday.
In early April, Musk owned nearly 9 percent of Twitter stocks. In the next 20-odd days, he announced to take over the social media giant for USD 44 billion. In early July, however, he tore up his April 25 agreement to buy Twitter.
This prompted Twitter to sue Musk to force him to complete the transaction, dismissing his claim that they misled him about the number of spam accounts on the social media platform as buyer’s remorse in the wake of a plunge in technology stocks.
The case also has two Indian links: one, Twitter CEO Parag Agrawal, is an Indian-American; and two, the Musk team has referred to Twitter’s struggles with Indian law.
The corporate world is now waiting for the two sides to head to trial on October 17 in a US court.
But, before that, according to reports, they might yet settle the deal out of court, and Musk may still walk away with Twitter for less than USD 44 billion.
Some indications that he wanted to own his own social media platform came through. Musk also teased on Tuesday that he could start his own social media platform. When asked by a Twitter user if he had thought about creating his own platform if the Twitter deal didn’t close, he replied: “X.com.”
According to legal experts, he might sell more Tesla shares if the court forces him to complete the Twitter acquisition or settle the dispute with a stiff penalty.
According to multiple filings, Musk sold about 7.92 million shares between August 5 and 9. The reports said he now owns 155.04 million Tesla shares, or just under 15 percent of the automaker.
Tesla shares rose nearly 15 percent since the automaker reported better-than-expected earnings on July 20, also helped by the Biden administration’s climate bill that, if passed, would lift the cap on tax credits for electric vehicles.
Tesla shares have risen about 35 percent from recent lows reached in May, though are still down about 20 percent this year.
At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.”
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 of the deal to USD 33.5 billion. He had previously announced that he secured USD 7.1 billion of equity commitments from investors including billionaires Larry Ellison, Sequoia Capital, and Binance.
