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Elon Musk sells $6.9bn in Tesla equity as Twitter deal rises

by zerfeshan arshad
August 11, 2022
in Tech
Elon Musk claims Twitter will soon include voice and video chat

Elon Musk claims Twitter will soon include voice and video chat

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Elon Musk, CEO of Tesla, sold $6.9 billion in Tesla stock, claiming the cash would be used to finance a prospective Twitter takeover if he lost a court fight with the social media giant.

“It is critical to prevent an emergency sale of Tesla shares in the (hopefully improbable) case that Twitter pushes this transaction to complete *and* certain equity partners do not come through,” he stated in a tweet late Tuesday.

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In early trading, shares of the microblogging site surged 3.5% to $44.35 per share, but much below Musk’s offer price of $54.20 per share. Tesla stock was up almost 4% to $882.

Musk reneged on his April 25 deal to acquire Twitter for $44 billion in early July. Twitter has sued Musk in an attempt to compel him to finish the acquisition, rejecting his allegation that he was deceived about the number of spam accounts on the social media site as buyer’s remorse after a drop in technology stocks. On October 17, the two parties will go to trial.

Following the news of the share sale on Tuesday, Musk responded on Twitter with “yes” when asked whether he was done selling Tesla shares, adding that he would purchase it again if the Twitter acquisition did not complete.

“The absence of the ‘firesale’ risk, the fact Musk has already raised funds in case a Twitter decision goes against him, and Musk’s declaration that he’ll buy back shares if the Twitter transaction is canceled all add up to a bullish bias for Tesla,” said Mark Taylor, a sales trader at Mirabaud Securities.

Tesla did not immediately react to a request for comment from Reuters, and Twitter refused to comment.

The stock sale comes only days after Musk declared Tesla a “buying opportunity” during the company’s annual general meeting.

“Elon’s selling of (Tesla shares) during the last three days considerably raises the likelihood the (Twitter) merger gets done, although at a little lower price of $50-$51/share,” Future Fund LLC managing partner Gary Black said in a tweet.

Musk, the world’s wealthiest person, sold $8.5 billion in Tesla stock in April and said at the time that no more sales were planned.

However, legal experts have predicted that if Musk is forced to complete the purchase or resolve the issue with a heavy penalty, he would likely sell additional Tesla stock.

According to Wedbush analyst Dan Ives, the possibility of Twitter receiving a $5 billion to $10 billion settlement from Musk is beginning to be incorporated into the social media company’s shares.

According to Reuters estimates, Musk sold 7.92 million shares between August 5 and August 9, and currently controls slightly under 15% of the company. Musk’s entire Tesla stock transactions in less than a year now equal over $32 billion.

Musk hinted on Tuesday that he would launch his own social media network. When asked by a Twitter user whether he had considered starting his own platform if the transaction fell through, he answered, “X.com.”

He also said that Tesla would begin deploying the longer-range and more expensive version of its battery-powered Semi commercial vehicle this year.

The truck with a 500-mile range is projected to cost $180,000, but it would be eligible for a tax cut of up to $40,000 under a US subsidy scheme authorised by the US Senate.

Tesla announced plans for the Semi in 2017, however, the debut and volume deliveries to firms such as PepsiCo have been pushed back due to difficulties with the availability of the new 4680 battery cells.

Since the company posted better-than-expected results on July 20, Tesla shares have climbed roughly 15%.

zerfeshan arshad

zerfeshan arshad

Web content writer (Business)

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