Judicial arm wrestling with Twitter | Elon Musk is selling nearly $7 billion worth of Tesla stock

(Washington) In order to strengthen his back in his legal dispute over the uncertain outcome with Twitter, Elon Musk sold shares in his car company Tesla for almost 7 billion dollars at the beginning of August.

Posted at 6:30am

According to a document filed with the US Securities and Exchange Commission and published on its website on Tuesday, the multi-billionaire sold around 7.9 million Tesla shares between August 5 and 9.

In a tweet published Tuesday night, he said he wanted to “avoid a fire sale of Tesla stock” in what he hopes is an “unlikely” scenario in which he would have to buy Twitter and lose the support of some its financial partners.

Elon Musk on Saturday urged the Twitter boss to publicly discuss and prove the proportion of fake accounts on the social network, an issue the multi-billionaire raised to withdraw his bid and launch a legal battle.

Elon Musk signed a $44 billion deal to buy the social network in April before unilaterally breaking it in early July.

Elon Musk promised to offer $54.20 per Twitter share.

But he now believes Twitter lied about the proportion of automated accounts and spam on its platform, even claiming that the social network “cheated” by intentionally increasing the number of monetizable accounts.

8.5 billion already sold

The Tesla boss had already sold shares in his car company worth around $8.5 billion in April to prepare for the takeover of the social network.

At the time, however, Elon Musk had assured that there would be no further sales of Tesla titles.

The multi-billionaire is now challenging Twitter CEO Parag Agrawal to “publicly debate the percentage of fake accounts” on the network, urging him to “prove to the public that Twitter has less than 5% fake or unwanted daily users.”

The legal battle begins: A trial must open on October 17 in the Delaware Court of Chancery, a court specializing in business law, and last five days.

As soon as the takeover agreement was broken, Twitter sued the richest man in the world to force him to fulfill his promise. Elon Musk countered with a lawsuit in the same court, asking the court to release him from the agreement and order Twitter to pay damages.

The chances that he will get away with just paying the damages for breach of contract ($1 billion) or that he will be justified are judged by experts to be very slim.

Twitter shareholders are due to meet on September 13 to approve or not this acquisition, which would represent significant shareholder value.

Between the general stock market decline in recent months, the decline in social media advertising revenue related to the economy, and public criticism from Elon Musk, Twitter’s stock had plummeted to around $32 on July 11.

At Tuesday night’s close, shares of Twitter were up 0.26% at $42.83 and Tesla was down 2.44% at $850.

The automaker released solid second-quarter results in late July, with profit of $2.3 billion for the period, nearly double the second quarter last year.

But for the first time since early 2021, profits didn’t surge to a new record. And sales were also disappointing at $16.9 billion.

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