Saudi Fund, SpaceX shares: Musk wanted to take Tesla off the stock market, here’s how he planned to finance the operation – Business AM

Tesla boss Elon Musk is (again) in court for his tweets about taking the electric vehicle maker off the stock market in 2018. He justifies his tweets and explains how he intended to finance the takeover of all Tesla shares.

Why is this important?

These tweets had caused an uproar in the markets. Trading in Tesla shares even had to be suspended for a few days.

In the news : a file which dates from August 2018 and which is still being emulated today. This Monday, Elon Musk had to explain himself before the judges in the United States, concerning a tweet in which he claimed to have “raised the funds” to buy back all the shares of Tesla, at 420 dollars, and remove the company from the stock Exchange. He also said he had “investor support”.

  • He is accused by investors who consider these misleading tweets. These declarations made them lose money.

A handshake with the Saudis and shares of SpaceX

The essential : how Musk wanted to finance the takeover.

  • Elon Musk returns to the facts and justifies his tweets and his desire to remove Tesla from the stock market, reports CNBC. The first reason he said the “funds were in” was that he had a verbal commitment from the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund. A handshake had given him enough confidence, but in the end the agreement was not made.
    • Later, Saudi Arabia placed a mammoth order with Tesla rival Lucid. But the Saudis came on board with Musk when it took over Twitter: Prince Al-Walid bin Talal Al Saud is the second largest shareholder.
  • Second option: sell shares of SpaceX. “SpaceX’s actions alone meant ‘funding was secure’. It’s not that I wanted to sell the SpaceX stock, but I could have, and if you look at the deal to buy Twitter, that’s what I did. I sold shares of Tesla to complete the Twitter transaction. And I would have done the same here,” says Musk.
    • SpaceX is a company that is not listed on the stock exchange, and is one of the most valuable in the world in this category. Investors can nevertheless buy shares in the company, if it decides to sell. Musk, however, did not specify how many shares he wanted to sell, at what price or to whom.
  • The joke : $420? Musk also explains the proposed price. “420” is a reference to cannabis. The defense wonders if this price was a joke. For Musk, a proven enthusiast of this soft drug, it would rather be a “coincidence”. “There’s some, I think, karma around 420…I should be wondering if it’s good or bad karma at this point,” he replies.

$20 million fine

The detail : This is not the first time that Musk has been before the judges or the authorities for this matter.

  • Shortly after the tweets were sent, the US stock market watchdog, the SEC, convicted Musk and Tesla of fraud and market manipulation. They were fined $20 million. Musk had to sign an agreement that he would consult a specialized lawyer before posting tweets containing information about Tesla. An agreement for which he found himself several times before the SEC, because it considers that he does not respect it.
  • Otherwise, Musk’s tweets about the ability of electric vehicles to drive “autonomously” are also regularly under the magnifying glass of the authorities.

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