Tesla CEO Elon Musk admits he could need the funds if he loses legal showdown with Twitter and is forced to purchase the platform
Elon Musk has sold another tranche of Tesla shares, ahead of his courtroom showdown with Twitter in October.
Musk sold $6.9bn (£5.7bn) worth of shares in Tesla, after admitting that he could need the funds if he loses the battle with Twitter and is forced to buy the platform.
Last week Twitter labelled Elon Musk’s lawsuit counterclaims as “factually inaccurate, legally insufficient, and commercially irrelevant”.
In the agreement he signed with Twitter, Musk can only back out of the deal if something major happens to Twitter’s business.
There is doubt that Musk’s allegations about Twitter’s bot numbers may be enough of a justification.
Twitter can demand the $1 billion (£836m) contractual breakup fee from Musk, if he reneges on the agreement.
Musk however cannot be ordered to close the deal if his financing fails – provided he was not the cause of the failed funding.
Musk confirmed the share sale on Tuesday when he relied to a tweet from Sawyer Merritt, who revealed that Musk had filed a total of six Form 4s with the SEC showing that he sold 7,924,107 $TSLA shares worth about $6.9 billion.
In his reply, Musk explained his reasoning for the share sale.
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
“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,” Musk said.
Musk has committed more than $30bn of his own money to the financing of the deal, with more than $7bn of that total provided by a number of others including former Oracle CEO Larry Ellison, the Qatar state investment fund, and Binance – the world’s largest cryptocurrency exchange.
Musk sold $8.5bn worth of Tesla shares in April and said at the time there were no further sales planned.
His latest share sell-off leaves him with 155 million Tesla shares, or just under 15 percent of the world’s most valuable car maker.
Musk has sold nearly $32bn of Telsa stock in the past year, and despite that he remains the world’s richest man, with an estimated $250bn fortune, according to the Bloomberg billionaires index
It is also worth noting that Musk was quizzed on Tuesday if he would create his own social media platform if the Twitter deal didn’t close, he replied: “X.com”.