In the past few months, Elon Musk had vehemently denied selling Tesla shares to fund his acquisition of Twitter. Then came the news that Musk is backing out of the $44 billion deal and Tesla shareholders breathed a sigh of relief. However, it looks like their relief was short-lived.
Six SEC filings show that Musk has sold more Tesla shares in the past few days after a $8.4 billion sell-off in April. The incident was brought to light after Tesla investor Sawyer Merritt confronted Musk about his recent activity on Twitter.
The Tesla Shares Sell-Off
Musk justified the sale by saying that he took the step to avoid an emergency sale should Twitter force him to go through with the $44 billion deal. The microblogging site is suing Musk after he backed out of the deal, and has been granted a five-day trial that is set to begin on October 17.
Meritt tweeted that Musk had sold off 7,924,107 Tesla shares worth around $2.9 billion between August 5 and 9. He then asked Musk on August 10 whether he was done selling, to which the billionaire CEO replied “Yes. 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.”
Twitter does not seem ready to back down and there has been no word of a settlement. Initially, Musk had cleared off nearly $8.5 billion worth of stock when he had made the initial offer to buy Twitter Inc. On April 28, he had assured stakeholders that he had “no further TSLA sales planned after today.” Since then, Tesla’s shares have rebounded after plummeting briefly, following news of a possible sell-off. Experts are wary of his moves as the bear market has started faltering and the Fed Reserve is expected to hike interest prices, which could translate to more pain for equities, especially the tech sector.
According to Bloomberg, Musk has sold off nearly $32 billion worth of Tesla stock in the past ten months. He tweeted on Tuesday that he will buy back Tesla stock if he does not have to buy Twitter.
The price of Tesla shares stayed flat at around $850 during after-hours trading.
Musk’s Twitter Deal
Musk and Twitter have been engaged in a war of words ever since the billionaire investor pulled out of the deal. He has accused the company of providing bad information in its financial filings. In May, he wrote, “My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of
Twitter has sued Musk calling the fake account claims a distraction and mentioned that he is duty bound to close the sale at $54.20 per share. The social blogging site’s shares had plummeted to nearly $41 after Musk announced that he will be abandoning the Twitter deal.
Earlier, Musk challenged Twitter CEO Parag Agrawal to a “public debate about the Twitter bot percentage.”
Some analysts interpreted Musk’s moves as a negotiation tactic. In a separate matter, the SEC is investigating Musk, asking why the Tesla CEO did not apparently file a scheduled 13G form, announcing his acquisition of a significant stake in Twitter within the required time frame.
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