Elon Musk sells Tesla shares worth $6.9 billion. Here's why
After Musk backed out of the agreement to buy Twitter, the social media company filed a legal suit against him. (Photo: AFP)
Fighting a legal battle with Twitter over his terminated deal of buying the social media company, Elon Musk has sold $6.9 billion worth of Tesla shares.
The sale comes just four months after the world's richest person said he had no further plans to sell Tesla shares. Musk, 51, has now sold around $32 billion worth of stocks in Tesla over the past 10 months.
Musk offloaded the shares between August 5 and August 9, according to the filings. After the latest stock sale, he now owns 155.04 million shares in electric vehicle maker company, reported Reuters.
Why he sold Tesla shares: The Tesla CEO is in the midst of a legal battle with Twitter after the social media giant filed a case against him for aborting the deal to acquire the company. If he loses the case in court, he might be forced to complete the deal worth Rs $44 billion or $54.20 per share.
"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 tweeted.
Yes.
— 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.
What is the case? After Musk backed out of the agreement to buy Twitter, the social media company filed a legal suit against him. Twitter is trying to force the billionaire to stick to the deal and buy the social media company.
Twitter also wants the deal to happen quickly because it says the ongoing dispute is harming its business. Musk was pushing for a trial in February, but a judge in the US state of Delaware said the social media company deserved a quick resolution of the deal's uncertainty and set the trial date for October.
The Twitter deal: Musk struck a deal to buy Twitter on April 26. Musk had bought a nine per cent stake in Twitter earlier in April, and then offered to buy the whole company outright.
Musk had agreed to pay USD 54.20 for every share of Twitter. "Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," he said in a statement.
The spam bot issue: Musk has said that the real number of spam bots on Twitter may be four times higher than the company's estimates. Bots are fake accounts not controlled by a person, and can be used on social media to spread misinformation.
Twitter chief executive Parag Agrawal had said that fewer than five per cent of accounts active on any given day at Twitter are bots.
What's next? Legal experts have suggested that if Musk loses this battle against Twitter and is forced to complete the acquisition or pay a stiff penalty, he could have to sell more Tesla shares, reported Reuters.
Musk said he would buy some of his shares back if he doesn't have to go through with the Twitter acquisition.
Yes
— Elon Musk (@elonmusk) August 10, 2022
Musk also said that he will consider creating his own social platform, X.com, if the Twitter deal doesn't go through.
— Elon Musk (@elonmusk) August 10, 2022