The Real Reason Elon Musk Just Sold $6.9 Billion In Tesla Stock
In a surprising turn of events, the BBC reports that Elon Musk has sold more Tesla shares, worth approximately $6.9 billion — this, after saying just a few months ago that he didn't plan on dumping any more stock. In April, Musk offloaded Tesla shares valued at roughly $8.4 billion (via CNBC), sparking concerns that his move would drive Tesla down in the market and that his Twitter acquisition would prove to be a distraction from his obligations at the EV maker.
The sale of another $6.9 billion in Tesla shares comes weeks ahead of the court showdown with Twitter following the social media company's lawsuit against the billionaire. Twitter wants to force Musk's hands at going through with his $44 billion acquisition commitment, while Musk is trying to exit the deal, citing alleged misleading claims made by Twitter. At stake is a $1 billion payday as a severance that will be paid by the party that reneges on the original buyout contract.
Twitter is trying its hardest to make Musk pay up, while Musk continues to claim that Twitter is lying about the true magnitude of its bot accounts problem. A few days ago, Musk even challenged Twitter CEO Parag Agrawal to debate him over the issue — on Twitter — and hinted that the deal will go forward only when he gets his hands on the information he seeks. Some experts, however, are of the opinion that Musk's chances don't look very bright and he might end up having to fork out the cash.
Preparing for the worst
Explaining the reason behind selling another batch of Tesla shares valued at $6.9 billion in total, Musk confirmed that he is doing so as a contingency plan. "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. His plans sound rational, and the public disclosure makes a lot of sense as far as maintaining investor confidence goes.
To recall, Musk previously confirmed plans of securing $7.1 billion in equity backing from big-name investors such as Sequoia Capital, Binance, and Larry Ellison. Experts keenly observing the Musk-Twitter developments note that the latest Tesla shares sale is a sign that the deal will likely go through. That means Musk will have to cough up his share of the billions from the initial $44 billion deal valuation to pocket Twitter. If the deal doesn't materialize, Musk has hinted that he will turn "X.com" into his own social media platform, something he has been teasing for a while now.