It looks like Elon Musk isn’t quite sure he can pull out of the $44 billion Twitter takeover deal, when Musk reportedly sold nearly $7 billion in Tesla stock in recent days in preparation for the deal, if he’s told to pay up.
According to The Wall Street Journal:
“Mr. Musk, Tesla’s chief executive and largest shareholder, sold about 7.9 million shares between Friday and Tuesday, the disclosure shows, leaving him with a 15 percent stake in the company. The Tesla boss has been on a selling spree over the past year, during which he cashed out about $32 billion in shares of the electric car maker.”
The Musk/Twitter takeover is scheduled for a hearing in Delaware Chancery Court in October, after Musk and his team tried to pull out of the deal based on Twitter’s failure to convince them that only 5% of its active users were fake/bots.
In response, Twitter laid out its ‘blameless’ case against Musk’s various claims, and the court has scheduled an expedited trial based on Twitter’s counter-evidence. Twitter’s reverse incorporation also suggests that this element is not a legal impediment to closing the deal according to its original terms.
This means that Musk’s takeover will depend on the ability of Musk’s legal team to convince the court that the process of counting bots and fake Twitter accounts constitutes a material change to the original terms of the offer, which appears likely to prove difficult.
That’s why Musk is now taking steps to prepare for the likely loss that will likely still eventually lead to Musk becoming Twitter’s chief. Whether he wants to or not.
Of course, you could also argue that this is due diligence, and that Musk is simply taking steps to provide himself with insurance in case he loses the case. Some have also suggested that Musk’s entire Twitter takeover bid was an elaborate cover-up to facilitate a soon-to-expire Tesla stock sale. These latest sell-offs may also play a role in this narrative, allowing Musk to make even more money without causing market anxiety as he reduces his stake in Tesla.
It’s super rich guy math, and I won’t even pretend to understand the complexity of how that might work – but at least Musk seems a little concerned that he won’t win his upcoming lawsuit, and that he will indeed be forced to buy Twitter at the original agreed-upon price.
Although Ilon also noted that he has a backup plan in case his Twitter deal fails.
So Musk has a ‘pretty grand vision’ for what @X.com’, and ¡X Corporation’, with Twitter helping accelerate that plan, whatever it is.
So even if Elon loses his upcoming court case, he could still be looking at big waves on social media – while it could also suggest that Twitter could become uuH’ or something like that, in Elon’s broader plan.
Elon Musk twitet.
Either way, we’re getting closer to a resolution now, one way or another, with a trial date looming, and Musk preparing for the next phase, whatever it may be.