The world’s richest man, Elon Musk, may be in a better financial position than before he announced the $44 billion acquisition, given billions of dollars in cash are presently parked in banks as a result of his failed bid to acquire Twitter Inc.
The two parties are facing a possibly long court fight that may still cost Musk hundreds of dollars after Musk reportedly tore up his April 25 contract to purchase the social media network on Friday, and Twitter pledged to make him do the right thing. One hundred million dollars in the US. legal specialist
Regardless of the verdict, it appears that the Tesla CEO has around $8.5 billion in cash on hand after selling the automaker’s equity in late April to pay for the Twitter acquisition. Musk sold 9.6 million Tesla shares in the final week of April for an average price of about $885 per share.
Because he sold so much Tesla shares, especially at such a high price, “he’s almost likely in a better cash position now than he was a year ago,” according to Guidehouse Insights analyst Sam Abuelsamid.
But he can find himself in a far worse situation based on how this litigation turns out in the end.
Elon Musk trades Twitter and Tesla
Investors in Tesla are concerned that Musk’s purchase of Twitter may divert him from selling Tesla stock at a time when economic uncertainty and rivalry are on the rise. Although CEO stock sales often cause investors to get uneasy, the Twitter acquisition offers a logical justification for Musk’s decision to sell a significant portion of his Tesla holdings .Steve Burton : a star of “General Hospital,” files for divorce
Musk brought up lapsed options and taxes on the sale of more than $16 billion in Tesla stock in December.
Investor worries about inflation and a future recession have hurt Tesla shares and other growth firms, which have down 19 percent since the April sale. Tesla shares would currently be valued approximately $1.6 billion less if Musk had not sold them.
On the profits from selling his Tesla shares, Musk may have to pay income tax, although the exact amount is unknown.
Musk has received stock options worth billions of dollars from Tesla instead of a salary after exceeding many stock and performance targets in recent years. He still has an estimated $115 billion (16%) stake in Tesla.
According to Abuelsamid, Musk may have to sell further Tesla shares if his case against Twitter is unsuccessful and he is required to complete the acquisition or pay a substantial punishment, which would alarm investors and compromise the value of his remaining Tesla shares.
Before declaring that he would acquire the firm, Musk purchased Twitter shares, which underperformed.
Between January and April, Musk spent $2.64 billion for 73 million shares of Twitter, or around $36 per share. On Monday, shares of Twitter dropped 9.5 percent to $33.50. His Twitter stock is now worth around $200 million less at that price.