The boss of the electric vehicle manufacturer has a kind of airbag in the event of a breakdown in the current case surrounding the takeover of Twitter and the possible loss of some of his financial supporters.
In order to keep his back free in his legal dispute with the uncertain outcome with Twitter, Elon Musk sold shares in his automobile company Tesla for almost 7 billion dollars at the beginning of August.
According to a document filed with the SEC and released Tuesday night, the multi-billionaire sold around 7.9 million Tesla shares between Aug. 5 and 9.
In a tweet published overnight from Tuesday to Wednesday, he stated that he wanted to “avoid a fire sale of Tesla securities” in what he hopes is an “unlikely” scenario in which he would have to buy Twitter and lose the support of some of his financial partner.
In April he had already sold shares in his automobile company worth around $8.5 billion in preparation for the takeover of the social network.
At the time, however, Elon Musk had assured that there would be no further sales of Tesla titles.
Now with more than $15 billion in his pocket from those stake sales, amid a legal battle over the broken promise of his acquisition of Twitter, the fiery entrepreneur could be preparing to either pay compensation or ultimately fund the acquisition. said analysts.
“Musk may seek to resolve this explosive situation with a massive out-of-court settlement ahead of the October hearing date,” suggested Dan Ives of Wedbush Securities.
The analyst estimates the chances of an agreement with Twitter on a possible payment “in the range of 5 to 10 billion dollars” to be “more likely now”.
Tesla shares are up 2.50% at $871.25 around 16:00 GMT. Twitter’s was up 3.56% to $44.35.
On Saturday, Elon Musk urged the Twitter boss to publicly discuss and prove the proportion of fake accounts on the social network, an issue the multi-billionaire raised to withdraw his bid.
Elon Musk signed a $44 billion deal to buy Twitter in April before unilaterally canceling it in early July.
The Tesla boss believes Twitter lied about the percentage of automated accounts and spam on its platform, even claiming that the network is “scamming” by intentionally increasing the number of monetizable accounts.
The multi-billionaire called on Twitter CEO Parag Agrawal to “publicly discuss the percentage of fake accounts” and “prove to the public that Twitter has less than 5% of fake or unwanted users on a daily basis.”
The lawsuit is open: A five-day trial is scheduled to begin on October 17 before the Delaware Court of Chancery, a court specializing in business law.
As soon as the takeover agreement was broken, Twitter sued the richest man in the world to force him to fulfill his promise. Elon Musk countered with a lawsuit asking the court to release him from the agreement and to seek damages from Twitter.
The chances that he gets away with just paying the damages for breach of contract ($1 billion) or that he is justified are judged by experts to be very slim.
Twitter shareholders are due to meet on September 13 to approve or not this acquisition by Elon Musk, which would represent significant shareholder value.
The Tesla boss initially promised to offer $54.20 per Twitter share.
Between the general slump on the stock market in recent months, the advertising revenue from social networks in connection with the economic situation and the public criticism of Elon Musk, the Twitter share collapsed to around $32 on July 11.
For its part, the electric vehicle maker reported solid second-quarter earnings in late July, with a profit of $2.3 billion, almost double the figure for the same period last year.
At Thursday’s shareholders’ meeting, which voted to split the company’s stock by three on August 25 to make the move more accessible to small shareholders, Elon Musk assured that the company was considering a buyback program. The next day he started selling his own titles… “It’s not looking very good for Musk,” commented Dan Ives.
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