Elon Musk sells Tesla shares worth $6.9b as Twitter lawsuit looms
Market immediately reacts as tech titan looks to free up cash for 'unlikely' Twitter deal
Tesla supremo Elon Musk has sold $6.88 billion worth of shares in the auto company, saying it is in case some equity partners exit ahead of an eventual Twitter deal, with both events deemed "unlikely."
Just hours ago, he told one of his many investor followers on the social media platform that he's trying to prevent an emergency sale of the stock.
Onlookers say the immediate effect will be the opposite and, like pretty much every activity by the world's richest man, will send investors scrambling to do the same with their holdings. The billionaire was presumably referring to a later emergency sale in the event his legal woes worsen.
This is the first sale of Tesla shares by Musk since April, when he sold 9.6 million, raising $8.5 billion at the time.
The trades came to light yesterday when Musk reported more than 120 separate transactions, amounting to 7.92 million shares, made over three days – August 5, 8, and 9 – to the SEC. He did not give a reason for the sale in the filing.
Some have speculated that one motive of a sell-off by someone influential would be to trigger a cascading sequence of sell trades, where they could then buy the stock back more cheaply.
Just hours after SpaceX completed a static fire test of Raptor engines on the Super Heavy's current prototype, the Booster 7, Musk responded to a question about the filings from one of his 100 million followers, a person who chose to place logos of both a rocket and an upward trending line graph next to their account handle:
Yes. 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.— Elon Musk (@elonmusk) August 10, 2022
By May, Musk claimed Twitter did not provide enough information for him to understand the true state of the business, so until the company disclosed the "true number" of fake bot accounts on its platform he would hold off on the purchase. Twitter has denied that its stats on bot accounts are inaccurate.
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The SpaceX exec later tried to formally kill the agreement without paying the $1 billion break-up fee.
This triggered the Delaware Chancery Court lawsuit by Twitter, with the social media platform's complaint alleging: "Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its share price."
On Tuesday, Tesla shares fell 2.4 percent to $850, while Twitter rose 3 percent to above $44, the idea being that Musk's latest move ups the chances the deal will go through.
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