(Washington) Eager to get his back in his legal dispute and the resulting uncertainty with Twitter, Elon Musk sold in early August nearly $7 billion worth of stock in his Tesla car group.
Posted August 10
According to a document filed by the SEC, the police of the American stock market and published on Tuesday evening, the billionaire unloaded about 7.9 million shares of Tesla between August 5 and 9.
In a tweet published on the night of Tuesday to Wednesday, he explained that he wanted to “avoid an emergency sale of Tesla securities”, in a situation – which he hopes is “impossible” -, where he would have to buy Twitter and would lose. the support of some of his financial partners.
In April, he had already sold shares worth $8.5 billion in his auto group to prepare for the purchase of the social network.
At the time, Elon Musk had however confirmed that there would be no further sales of Tesla shares.
With more than $15 billion in his pocket from these stake sales, the tycoon, in the midst of a legal dispute over his breach of promise to take over Twitter, may be preparing to either pay compensation, or eventually finance the takeover. analysts said.
“Musk can try to resolve this explosive situation before the trial date in October […] and large settlements out of court,” suggested Dan Ives of Wedbush Securities.
The analyst believed that a possible deal with Twitter could involve payments “from $5 billion to $10 billion” “now very likely”.
Tesla shares rose 2.50% to $871.25 around 4 pm GMT. That of Twitter rose 3.56% to $44.35.
On Saturday, Elon Musk challenged the Twitter boss to publicly discuss and verify some of the fake accounts on the social network, a controversial move that prompted the billionaire to withdraw his buyout offer.
Elon Musk signed a $44 billion deal in April to buy Twitter, before unilaterally canceling it in early July.
The boss of Tesla believes that Twitter lied about the ratio of automated accounts and spam on its platform, and even claims that the network is “cheating”, by deliberately increasing the number of accounts that can be monetized.
The billionaire asked Twitter CEO Parag Agrawal to “publicly discuss the percentage of fake accounts” and “confirm to the public that Twitter has less than 5% fake or unwanted users every day.”
The legal battle has begun: the case should be opened on October 17 before the Court of Delaware, a court specialized in business law, and last five days.
Once the takeover deal fell through, Twitter actually sued the richest man on the planet, to force him to keep his promise. Elon Musk responded, with a complaint asking the court to release him from the agreement and order Twitter to pay him damages.
The probability that he will withdraw by simply paying compensation for breaking the agreement (one billion dollars), or that he will be declared in his right, is considered very small by experts.
Twitter shareholders must meet on September 13 to approve or disapprove this acquisition by Elon Musk, which would represent significant added value for shareholders.
The Tesla boss previously promised to give $54.20 per Twitter share.
Between the general decline in the stock market in recent months, that of ad revenue from social networks linked to the state of the economy and public criticism from Elon Musk, the Twitter name had fallen to around $32 in July 11.
The electric car maker for its part posted solid results in the second quarter at the end of July, with a profit of $2.3 billion, almost double the same period last year.
At a general meeting of shareholders on Thursday, which voted to split the group’s bonds in three on August 25 to make the move more accessible to small owners, Elon Musk had confirmed that the group was considering a recovery plan. The next day, he started selling his own names… “It doesn’t look very good for Musk”, commented Dan Ives.