On Friday Elon Musk announced he was backing out of his $44 billion Twitter bid, as he accused the social media giant of refusing to allow him to confirm the number of fake accounts on the platform.
As the process now moves to the courts, some observers online have an alternate theory – that Elon wanted to sell $8.5 billion in Tesla stock options which were about to expire, but he needed a reason to placate Wall Street.
Josh Wolfe, co-founder of Lux Capital, tweeted Friday, “Entire thing was a clever ruse to SELL + LIQUIDATE $8.5 BILLION of TESLA STOCK (w/plausible excuse for doing it).” The tweet included the math showing Elon will walk away with more than $7 billion in liquidated Tesla stock, which was removed just prior to the markets downturn, and which was removed without triggering other investors on Wall Street asking if Elon were worried about Tesla’s performance.
In short the Twitter acquisition acted as a cover, allowing Elon to liquidate billions in Tesla stock without anyone asking if Elon were doing so because the stock was likely to decline in the future.
Wolfe then asked rhetorically, “Honestly think he can ‘land rockets’ but can’t fix ‘bots’?”
On April 4th, when Musk revealed he had taken a position in Twitter, Tesla was trading at $1145.45. On Friday it closed at $752.15.
Henry Blodget, founder and CEO of Insider, retweeted Wolfe, pointing out that Elon’s options were about to expire, “so he had to sell them. The Twitter bid did allow him to do that without his facing questions about why he was selling. And he sold at an excellent price!”
Musk has claimed he intended to purchase Twitter. But after trying to confirm the number of fake accounts as part of due diligence, his legal team accused Twitter of making, “false and misleading representations upon which Mr. Musk relief when entering into the Merger Agreement.”
Twitter chairman Bret Taylor said Twitter is, “committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery”
