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Elon Musk says his SpaceX shares could have also helped fund taking Tesla private



Elon Musk Says He'd Sell SpaceX Stock To Take Tesla Private In 2018

(CTN News) – Tesla CEO Elon Musk said he could have taken Tesla private in 2018 by selling shares of SpaceX. At the time, and still today, he was both the company’s CEO and its largest shareholder.

In a series of tweets Musk wrote in August 2018, he said that he had “funding secured” to take Tesla private for $420 per share, and that “investor support” had been “confirmed.”

After his tweets, Tesla stock was suspended, and its share price remained volatile for weeks.

Class action shareholders claim Elon Musk’s tweets were reckless and false and relying on his statements to make investment decisions cost them significant amounts of money.

Based on a handshake, Elon Musk claimed that Saudi Arabia’s sovereign wealth fund had verbally committed to his price, and he was sure the funding would come through. It never came to fruition, however.

Musk said on his second day on the witness stand that another reason he said he had “funding secured” for the deal in 2018 was his ability to sell shares of SpaceX, a U.S. defense contractor and satellite internet company he also runs, to finance it.

“SpaceX stock alone means funding is secured,” Musk said under oath. Having said that, I could have sold SpaceX stock, and if you look at the Twitter transaction, that is exactly what I did.

For the Twitter transaction to be completed, I sold Tesla stock. The same would have been true here as well.”

To finance the Tesla buyout, Elon Musk did not specify how many shares of his reusable rocket maker he had been able to sell. He also didn’t specify to whom or at what price.

As of April 2018, SpaceX had raised about $214 million as part of a financing round seeking over $500 million in total equity funding. This is according to a Securities and Exchange Commission filing.

Tesla shareholders’ attorney, Nicholas L. Porritt of Levi & Korsinsky, asked Elon Musk if 420 was a joke since the term refers to cannabis.

It was merely a coincidence, Elon Musk insisted. The number 420 appears to have some karma, he said. Either well or bad karma at this point.”

Legal action over Musk’s tweets is not the first he’s faced. Soon after Musk sent them, the SEC charged Musk and Tesla with civil securities fraud, and they both paid $20 million in fines to settle the charges.

Musk agreed to relinquish his chairmanship at Tesla temporarily, and a securities lawyer was to vet tweets that contained material business information about Tesla before he posted them.

They later signed a revised consent decree.

Following a leveraged $44 billion buyout of Twitter in October 2022, Elon Musk became the company’s CEO since Al waleed bin Talal bin Abdul aziz, the company’s second-largest shareholder after Musk.

Senator Chris Murphy, D-Conn, requested a review of Elon Musk-Twitter’s financing in a November letter.

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