• Thu. Jun 13th, 2024

Elon Musk sell $6.9bn Tesla shares as Twitter court battle looms


Aug 14, 2022

Elon Musk has sold $6.9 billion worth of shares in Tesla to avoid what he said was an emergency sale should Twitter succeed in forcing him to close the $44 billion takeover.

The social media group is suing him to complete the deal after he moved to walk away from a bid last month and has been granted a five-day trial that is due to begin on October 17.

The share sale comes four months after Musk, the Tesla chief executive and the world’s richest man, said he had no further plans to sell shares in the electric car maker after an $8.5 billion sale of stock shortly after he offered to buy Twitter.

Musk, 51, said in a tweet: “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.”

Asked by followers if he was done selling and would buy Tesla stock again if the $44 billion deal did not close, Musk tweeted: “Yes.”

Musk, 51, sold about 7.92 million shares between August 5 and August 9, according to filings. He now owns 155.04 million shares in Tesla. The latest sales bring total stock sales by Musk to about $32 billion in less than one year.

Twitter claims that Musk is trying to renege on the deal because he agreed to pay a 38 per cent premium to Twitter’s share price just before the stock market fell. There has also been a drop in the value of Tesla, where much of Musk’s personal wealth is held.

Twitter, founded in 2006 and based in San Francisco, runs one of the world’s largest social networks. It accepted Musk’s $54.20-per-share offer in April, after he disclosed a 9 per cent stake and turned down an invitation to join its board.

Musk, who is also chief executive of SpaceX, the rockets and satellites group, is said to have a personal fortune of about $230 billion, according to Forbes. It is largely derived from stakes in the companies. He is one of Twitter’s most prominent users, with more than 100 million followers.

His deal for Twitter had been widely deemed to be in jeopardy when Musk declared in May that it was “on hold” until he had more information about so-called fake accounts on the platform.

His lawyers moved to terminate the takeover last month, arguing that Twitter was in “material breach” of the merger agreement. Twitter in turn sued Musk, alleging that he had committed “a long list” of his own contractual breaches.

The two sides face a drawn-out legal battle that could yet cost Musk billions of dollars. Legal experts have suggested that he might have to sell more Tesla shares should he lose his battle against Twitter and is forced to complete the acquisition or pay a heavy penalty.

Tesla shares have fallen 29 per cent since the start of the year, closing down 2.4 per cent, or $21.27, at $850 yesterday. Twitter shares are up 0.4 per cent so far this year. They closed slightly down yesterday at $42.83.