Twitter lawyer: No 'exit ramp' for Elon Musk out of takeover deal

New York (CNN Business)Tesla CEO Elon Musk sold 7.9 million shares of Tesla stock in recent days, raising $6.9 billion with the sales.

The sales from Friday through Tuesday were disclosed in a series of filings with the Securities and Exchange Commission late Tuesday night. They mark the first sale of Tesla shares by Musk since April, when he sold 9.6 million shares, raising $8.5 billion at that time.
Those April sales came soon after Musk had reached a deal to buy Twitter for $44 billion. But a month ago he announced that he does not plan to go through with that deal, arguing that Twitter management did not disclose material information about how many user accounts were bots and spam accounts rather than accounts run by actual people. Twitter (TWTR) quickly sued to force Musk to go ahead with the deal on the terms reached in April.

    Musk’s filings did not disclose the reason for the stock sales. But after someone on Twitter asked him if he was done selling Tesla shares, he responded “Yes” and then pointed to the possibility of being forced to buy Twitter as the reason for this latest sale.

      “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,” he said in his tweet.

      But at the time he sold the Tesla (TSLA) shares in April, he tweeted “No further TSLA sales planned after today.”
      When someone else asked on Twitter Tuesday if he would repurchase Tesla shares if the Twitter deal does not close, he replied “Yes.”

        Shares of Tesla have lost nearly 20% of their value so far this year, although they have rebounded 14% since reporting earnings in late July.
        “This is the last thing Tesla investors wanted to see,” said Daniel Ives, tech analyst for Wedbush Securities. “The biggest fear has been that Musk sells more stock, and that’s what just happened. It’s a near-term gut punch. There’s no explanation and that adds to the uncertainty.”
        Musk has previously sold Tesla shares primarily when he needed to raise cash to pay taxes on the exercise of options that were due to expire. The sales of stock in April soon after the Twitter deal was reached was the first significant sale of Tesla shares by Musk for reasons other than a looming tax bill.

          Musk received an average price of $869 a share for the shares he sold in recent days. That’s down from an average price of $883 a share on his Tesla sales in April, and well below the $1,046 average that he received when selling 15.7 million shares late last year. That sale was to cover an expected record personal income tax bill which he faced as a result of exercising options that had been set to expire.
          Even with the latest stock sales, Musk owns 155 million shares of Tesla, and has options to buy nearly 100 million more at a fraction of current prices. The shares he owns, combined with the options he holds to buy other shares, gives him control over about 20% of Tesla outstanding shares. And the 7.9 million shares he just sold represent less than 3% of the shares and options he holds.
          Source: Read Full Article