Elon Musk has sold 7.92 million shares of electric car company Tesla. When cashed, the amount is equivalent to 6.88 billion US dollars. Based on documents filed with the US Securities and Exchange Commission (SEC), the sale of shares occurred after Tesla’s annual shareholders’ meeting which took place last week.
The last recorded transactions were made on August 5, 8, and 9, 2022. The Tesla and SpaceX boss also acknowledged the sale of the shares. Musk said he needed the money if he was forced to acquire Twitter and couldn’t secure some of Tesla’s stake.
“Yes. Regarding (hopefully not) Twitter forces this deal to close and some equity partners don’t succeed,” said Elon Musk via his personal Twitter handle @elonmusk, Friday (11/8/2022). “It is important to avoid an emergency sale of Tesla stock,” he added.
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.
In a reply to netizens, Musk said that if the Twitter acquisition failed to materialize, he would buy Tesla shares again.
Musk announced the cancellation of the Twitter acquisition on July 8 US time. The reason is because Twitter is considered to have violated the agreement and is not transparent about the number of spam accounts and bots circulating on its platform.
Following the announcement, Twitter sued Elon Musk and held the world’s richest man responsible for completing the acquisition.
“Twitter is taking this action to prevent Musk from further infringement, to compel Musk to fulfill his legal obligations, and to force the completion of the merger after meeting several unresolved conditions,” Twitter wrote in its lawsuit to the Delaware court.
Musk later sued Twitter in the same court. Unfortunately the details of the lawsuit are still kept secret.
The judge handling Twitter’s lawsuit has scheduled Elon Musk’s first trial to take place in October.
The value of the acquisition of Twitter that has been agreed upon by the two parties is 44 billion dollars . Under the terms, Elon Musk is obliged to pay the acquisition cost of up to 33.5 billion US dollars. While the rest is paid from debt, as compiled from the Financial Times, Thursday (11/8/2022).
This deal can indeed be canceled with a penalty fee of 1 billion US dollars. But the cancellation of the acquisition must be based on evidence of a “material adverse event” on Twitter. Musk could also cancel the acquisition if the debt needed to complete the deal is not available.
After agreeing on the value of the purchase of shares, in May 2022, Elon Musk suddenly took issue with the number of bot and spam accounts on Twitter. In fact, Elon Musk has signed a definitive agreement to acquire Twitter on April 26.
Initially, Twitter claimed that the total bot and spam accounts circulating on its platform were only 5 percent of the total 226 million monetizable daily active users (mDAU).
However, Musk doubts the data and predicts the total number of bot and spam accounts circulating at 20 percent of total users, aka five times more than Twitter claims. To that end, Musk asked Twitter to prove his claim.
Musk threatened to cancel the Twitter acquisition process because Twitter has not yet provided the data that Musk requested. As of July, Twitter had not provided the data Musk requested. Musk’s camp also concluded that the number of spam accounts and Twitter bots could not be verified.
This makes Musk’s team hesitate to buy Twitter because it can’t evaluate Twitter’s business prospects in the future. Elon Musk then filed an annulment of the Twitter acquisition with the United States (US) Securities and Exchange Commission aka SEC on July 8, 2022.
For Twitter, the problem with the number of spam accounts and bots is just another excuse from Musk. The reason, according to Twitter, Elon Musk never asked about the number of spam accounts and bots before the acquisition agreement was signed.