California Observer

As Lawsuit Looms Musk sells $6.9bn Tesla Shares

Image Source: The Verge

Elon Musk, CEO of Tesla, has sold 7.92 million additional shares of the electric vehicle manufacturer for around $6.88 billion.

Elon Musk to pay $44 billion to Twitter

According to regulatory documents, the sales happened following the company’s annual shareholder meeting last week.

In case he is compelled to pay $44 billion for Twitter, according to Mr. Musk, he needs the money.

The billionaire is presently embroiled in a legal battle with the social networking site after declaring last month that he would cancel a plan to buy it.

Six filings with the US Securities and Exchange Commission indicate that the most recent transactions took place on August 5, 8, and 9.

Musk replied “yes” to a tweet asking if he had finished selling Tesla shares after the news of the share sale became public. Therefore, adding that he needed the money in case he was forced to acquire Twitter. He was unable to secure some of the funds for the deal.

It’s crucial to keep Tesla shares from being sold in a hurry.

When asked by another user if he would purchase Tesla shares once more if the Twitter takeover does not occur, Mr. Musk also replied, “yes.”

Twitter sued Mr. Musk after he announced in July that he would withdraw from the acquisition process.

According to the richest man on earth, the corporation is allegedly hiding information regarding phony accounts.

A US judge decided last month that the October trial date for Twitter’s case against Mr. Musk should stand.

Read Also: Twitter vs. Musk takeover trial set for October 

Twitter is hoping that the judge will instruct Mr. Musk to carry out the acquisition at the agreed-upon price of $54.20 per share.

Mr. Musk has sued Twitter in response, though the specifics of that litigation have not been made public.

Twitter said in July that it had invested $33 million towards the potential deal between April and June.

It also stated that 237 million monthly active users were now, which was worse than predicted. However, the company reported a net loss of $270 million.

Tesla also disclosed last month that it had sold off 75% of its Bitcoin, which had a value of $2 billion at the end of 2021.

When the corporation disclosed a significant investment in the biggest cryptocurrency in the world, it caused a stir last year.

According to Tesla, the $936 million from its Bitcoin sales was used to purchase conventional currencies.

The Securities and Exchange Commission received a number of documents late on Tuesday night. It included information about the sales from Friday through Tuesday. They are Musk’s first Tesla share sales since he sold 9.6 million shares in April, raising $8.5 billion at the time.

These sales in April happened not long after Musk and Twitter agreed to a $44 billion agreement. But a month ago, he said that he would not proceed with that agreement. Therefore, claiming that Twitter management had withheld critical information about the number of user accounts. Those were spam and bot accounts rather than legitimate accounts operated by real people. As a result, Twitter (TWTR) filed a lawsuit right away to compel Musk to finalize the agreement as agreed upon in April.

Musk has sold Tesla shares in the past

In the past, Musk mainly sold Tesla shares when he required the money to pay taxes on exercising options that were about to expire. However, the first large sale of Tesla stock by Musk made in April, shortly after the Twitter agreement, was for reasons other than an impending tax payment.

Read Also: Musk denies he had an affair with Sergei Brin’s wife 

Musk received an average price of $869 per share for the shares he recently sold. This is significantly less than his $1,046 average price when selling 15.7 million shares late last year. In April, his Tesla transactions had an average price of $883 per share. That transaction was conducted in order to cover a projected record personal income tax bill he would have to pay after exercising soon-to-expire options.

Musk still owns 155 million shares of Tesla, despite the most recent stock sales. He has the option to purchase an additional approximately 100 million at a substantial discount. His ownership of shares and the options he has to purchase further shares give him control over around 20% of the outstanding Tesla shares. Additionally, the 7.9 million shares he recently sold make up less than 3% of the shares and options he currently owns.

Leave a Comment

Your email address will not be published.

Opinions expressed by California Observer contributors are their own.