The Tesla boss has to provide collateral for the Twitter takeover.
(Photo: dpa)
new York Tesla boss Elon Musk has sold further large packages of Tesla shares in the middle of his Twitter takeover attempt. He sold a total of about 9.6 million shares in the electric car maker this week, taking about $8.4 billion, according to SEC filings. After that, however, no further sales are planned for the time being, he wrote on Twitter on Friday night.
Musk did not give any reasons for the stock sales in several large transactions in the documents. According to the SEC filing, the tech billionaire monetized 4.4 million Tesla shares on Tuesday and Wednesday, and another 5.2 million on Thursday. Musk had already sold more than $16 billion worth of Tesla stock in the fall, largely to pay taxes due on redeemed stock options.
However, he has now committed to bringing in his own funds of up to $21 billion for the Twitter purchase. How exactly he wants to raise them is still unclear. Musk still holds a good 168 million Tesla shares after the recent sale. He wants to use part of it to secure a loan of 12.5 billion dollars, which is also intended to finance the Twitter deal.
Musk made a total of $46.5 billion in financing commitments for the Twitter purchase. He agreed to the takeover with the online service, but is still dependent on enough shareholders giving him his shares at a price of $54.20.
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Musk wants to make the $44 billion Twitter purchase a financial success as quickly as possible. He told banks funding the acquisition that he could cut executive salaries and find new ways to monetize tweets, three people familiar with the matter told Reuters. That was part of his presentation to financial institutions to secure funds for the billion-dollar purchase.
controversy over freedom of speech
The tech billionaire explains his interest in Twitter by saying that freedom of speech is restricted on the platform. He wants to change that. This brings him in line with conservatives, corona skeptics and supporters of ex-President Donald Trump in the USA, all of whom complain about “censorship” on Twitter. On the night of Friday, Musk also revealed his political stance a bit further in a tweet: He supported President Barack Obama at the time, “but today’s Democratic Party was hijacked by extremists”.
There is some skepticism among market observers about Musk’s announcements. Elias Groll of the influential US think tank Brookings Institution believes that if Musk makes the purchase, which is not yet certain, “this will represent an uncertain new era in the history of the platform”. Groll continues, “Musk may find his vision clashes harshly with the difficult realities that come with operating a global social media platform.”
Apparently, Musk wants to go back to an earlier version of Twitter with relaxed content control rules, Groll said. However, this increases the risk of “Nazi outbreaks, racist attacks, medical misinformation and threats of rape” on the platform. It is unclear how Musk will react to this.
“Although billed as a ‘free speech’ struggle, this takeover is actually a content moderation struggle,” explains Mike Proulx of research house Forrester. Proulx doubts “whether Musk will take action against disinformation and hate speech on Twitter”. The moderation of such content could fall victim to his anti-censorship campaign.
On Wall Street, Musk’s $44 billion acquisition is expected to pose no antitrust issues. However, as revealed on Thursday, Musk could run into trouble with the disclosure requirements for building his initial 9 percent stake in Twitter. This is reported by the US magazine “The Information”, citing insiders.
The US regulator FTC has therefore launched an investigation into whether Musk violated his antitrust reporting obligation. In his initial filing with the SEC, Musk said he was acting as a passive investor. In view of his harsh criticism of Twitter management and the takeover plan announced shortly thereafter, however, this account is increasingly in question.
With material from dpa and Reuters.
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