Home Markets Elon Musk says he would sell SpaceX stock to take Tesla private

Elon Musk says he would sell SpaceX stock to take Tesla private

by SuperiorInvest

Elon Musk speaks near the Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger to fly around the moon aboard a SpaceX BFR launch vehicle.

DAVID MCNEW | AFP | Getty Images

Elon Musk He told a federal court in San Francisco on Monday that he could have sold shares of SpaceX to take it over Tesla private in 2018. He was then and still is the CEO and largest shareholder of both companies.

Musk is being sued by Tesla shareholders over a series of tweets he wrote in August 2018 saying he had “secured financing” to take the automaker private for $420 a share and that “investor support” for such a deal had been “confirmed.” . Trading in Tesla was halted after his tweets, and the stock price remained volatile for several weeks.

In the certified class-action lawsuit, the shareholders allege that Musk’s tweets were reckless and false, and that relying on his statements to make investment decisions cost them a significant amount of money.

Musk would do it later claim that he had a verbal commitment from Saudi Arabia’s sovereign wealth fund and was confident that funding would come at his proposed handshake price. However, the deal never materialized.

During his second day on the witness stand Monday, Musk argued that another reason he said he had “funding secured” for the 2018 deal was so he could sell shares in SpaceX, the U.S. defense contractor and satellite internet company that also running, in order to finance the transaction.

Musk said under oath: “The SpaceX stock itself meant ‘funding secured’ by itself. It’s not like I wanted to sell SpaceX stock, but I could do it, and if you look at the transaction on Twitter – I did. I sold Tesla stock to complete the transaction on Twitter. And I would do the same here.”

Musk did not say how many shares of his reusable rocket maker he would be able to sell, to whom and at what price, to finance the Tesla buyout.

In April 2018, SpaceX announced the va financial filing with the SEC that it raised about $214 million as part of a funding round in which it was seeking more than $500 million in total equity funding.

Shareholder lawyer Nicholas L. Porritt of Levi & Korsinsky asked CEO Musk if the price he proposed for Tesla stock was a joke because 420 is a reference to cannabis in pop culture.

Musk insisted it was an accident. He said, “I think there’s some karma around ‘420’… I should ask if it’s good karma or bad karma at this point.”

This isn’t the first legal action Musk has faced over his tweets. The SEC charged Musk and Tesla with civil securities fraud shortly after he sent them, and they paid separate $20 million fines to the federal agency to settle the charges. They later signed a revised consent decree that required Musk to temporarily relinquish his role as Tesla chairman and have a securities attorney review the tweets, which contain material business information about Tesla, before releasing them.

Musk recently became CEO of social network Twitter after leading a $44 billion leveraged buyout of the company in October 2022. Saudi Prince Alwaleed bin Talal bin Abdulaziz is the second largest shareholder in the social networking company after Musk. Last November, Sen. Chris Murphy, D.-Conn. sent a letter Committee on Foreign Investment in the United States request for review financing the Musk-Twitter deal.

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