Musk sells nearly $7B in Tesla shares to finance Twitter deal
Elon Musk, CEO of the electric vehicle maker Tesla, has sold about $7 billion worth of the company’s stock, a move he said on Twitter was an effort to raise cash in case he was forced to complete his $44 billion deal to acquire Twitter.
The sale of 7.92 million Tesla shares started Friday, Musk revealed Tuesday in securities filings, a reversal from his previous statements that he would not sell additional shares to finance the Twitter deal.
Musk signed the deal in April to acquire the social media company only to announce months later his intent to pull out, citing concerns about its accounting of fake users. His hesitancy coincided with a deep plunge in shares of technology companies, including Tesla, the primary source of his wealth.
Twitter has sued Musk to force him to close the deal through a provision of the contract known as “specific performance.” A judge in the Delaware Chancery Court will decide in October whether he must follow through on the acquisition.
In a tweet Tuesday, Musk said he had sold the shares because, 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 is the richest man in the world, but much of his wealth is tied up in shares of Tesla. He also said Tuesday he would buy more Tesla stock if his deal to buy Twitter did not close.
In April, Musk sold $8.5 billion shares in Tesla to help fund the deal, before tweeting that he had no further sales planned.
Shares of Twitter were up almost 4 percentWednesday, though still far below the $54.20 a share Musk has offered for the company. Shares of Tesla also rose nearly 4 percent.
In addition to about $13 billion in debt financing, Musk said in May that he would pay for the Twitter acquisition with about $33.5 billion in cash, through a combination of his own funds, outside investors and partnership with other Twitter shareholders. He had already signed a list of Silicon Valley heavyweights — including the venture capital firm Andreessen Horowitz and tech mogul Larry Ellison — to commit about $7.1 billion toward the deal. Other backers include cryptocurrency companies, family offices, sovereign wealth funds, property firms and mutual fund companies.
Many of those backing Musk’s bid have been subpoenaed by Twitter in an increasingly bitter courtroom proceeding.
Musk has cast doubt on the way that Twitter accounts for its number of fake users. Twitter has defended its process, which it says includes proprietary and confidential information.
Over the past few weeks, both Twitter and Musk have sparred over details of the deal. Musk unveiled his counterclaims last week against Twitter, accusing the company of committing “fraud” and forcing him into a sale.
Twitter’s chairman, Bret Taylor, called his claims “factually inaccurate, legally insufficient and commercially irrelevant.”
Musk has appeared to strike a more open tone toward the possibility of going through with the deal.
On Saturday, he tweeted: “If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms.”
Still, Musk appears intent on keeping doors open. In response to a question on Twitter about whether he would create his own social platform if the deal does not close, he responded, “X.com.” Musk, who has an affinity for the letter X, has spoken about a desire to create a rival service.