Elon Musk goes back on his word and sells 7.9 million Tesla shares
The billionaire said there would be no further sales, but with the Twitter trial looming, he said such a move was necessary
Trusting Elon Musk is risky. The richest man in the world agreed to buy Twitter for about $44 billion, and three months later he backed down. He sold $8.5 billion worth of Tesla shares to pay for the deal, and said no further sales were planned. But three months later – despite backing down from the Twitter deal – he has surprised the market by announcing the sale of nearly $7 billion worth of shares in the electric vehicle maker.
The business tycoon reported the operations to the US Securities and Exchange Commission (SEC), the government oversight agency responsible for regulating the securities markets. Musk has filed six different operations on Tuesday night, with dozens of sales operations carried out between last Friday and Tuesday.
In total, Musk has sold just over 7.9 million shares worth about $6.9 billion. Following those deals, Musk still owns 155 million Tesla shares, which are valued at more than $130 billion.
Tesla share prices have fallen as a result of the sales, dropping by 8.8% to $850 per share. So far this year, Tesla shares have fallen 29%.
Musk previously sold Tesla shares in late April after announcing his intention to buy Twitter. The billionaire revealed that in the three days following the agreement to buy the social network, he sold $8.5 billion worth of Tesla shares. After reporting the first part of those sales, for about $4 billion, Musk tweeted: “No further TSLA sales planned after today.” But he did not clarify that he had yet to announce the additional sales.
In April, it was clear Musk sold the shares to buy Twitter. With respect to the latest sale, the billionaire said the funds could be used to finance a potential Twitter deal if he loses a legal battle with the social media platform. “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,” he wrote.
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.
Musk in early July tore up his April 25 agreement to buy Twitter for $44 billion. Twitter has sued Musk to force him to complete the transaction, dismissing his claim that he was misled about the number of spam accounts on the social media platform as buyer’s remorse in the wake of a plunge in technology stocks.
The Wilmington judge in charge of the case has decided the trial will take place between October 17 and 21. The billionaire businessman’s lawyers had asked for the process to be postponed until February 2023, arguing the need to determine the real number of fake and bot accounts on the platform, which Twitter has estimated at less than 5% of the total. But Chancellor Kathaleen St. Jude McCormick, the head judge of Delaware’s Court of Chancery, agreed with Twitter’s view that an earlier trial was preferable due to investor uncertainty. In July, Twitter announced it would hold a shareholder meeting on September 13 to vote on the buyout deal.
Musk is also facing trial for his 2018 CEO performance award, which consisted of 101.3 million stock options. A lawsuit filed by a shareholder claims the package was excessive.