Elon Musk changes his mind. April, tweeted that he had no plans to sell any more Tesla stock. However, in the past few days, the tycoon has dumped nearly eight million shares valued at just under $7 billion.
Why did Elon Musk sell so many shares of the company he co-founded? To have enough cash in case the judges force him to complete the Twitter purchase and some of the other investors involved in the deal are not going ahead.
And why not wait for the judge’s decision to sell (or not) these shares? According to Musk himself he does it to avoid a possible fire sale of Tesla shares in the event the purchase of Twitter needs to be completed.
In a second tweet, Elon Musk assured that if he is not forced to complete the purchase of Twitter, he will buy back Tesla shares.
Like many other billionaires, it’s important to remember this most of Elon Musk’s fortune is tied to stocks he owns in companies like Tesla, not in liquid assets. Therefore, to make a purchase like that of Twitter, the tycoon must resort to financial instruments that provide him with liquidity or simply sell a percentage of his shares.
In the (hopefully unlikely) event that Twitter pushes through this deal *and* certain financial partners don’t come forward, it’s important to avoid a fire sale of Tesla stock.
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.
— Elon Musk (@elonmusk) August 10, 2022
Elon Musk and Twitter will be tried in October
It remains to be seen whether or not Elon Musk will be forced to complete the purchase of Twitter. However, whether the tycoon is preparing for such a scenario is likely to spark all sorts of speculation. especially among investors. For example: Is Musk preparing for such a scenario because he sees it as quite likely?
The lawsuit between Elon Musk and Twitter which will begin in Delaware on October 17 and, according to the schedule announced by Judge Kathaleen McCormick, it will end five days later (October 21). Twitter initially wanted it to take place in September, while Elon Musk tried to postpone it to 2023.
The central point of the trial, let us remember, is whether Elon Musk will be forced to complete the purchase of Twitter he committed to in the first half of 2022. The mogul decided to take a break and then cancel the purchase due to discrepancies regarding the number of active spam accounts on the platform. Twitter, following this move, decided to sue the mogul for breach of the purchase agreement between the two parties.