Shulou(Shulou.com)11/24 Report--

According to news on Oct. 8, investors in Tesla's stock should note that time is running out for CEO Elon Musk (Elon Musk) to cash in Tesla's stock to raise cash for the Twitter acquisition. As Musk's time window for cashing out Tesla shares is about to open again, he is very likely to push up Tesla's share price again and get more cash.

Tesla shares closed down 6.32% at $223.07 on Friday local time. Tesla shares have fallen more than 10 per cent since Mr Musk announced on Tuesday that he would continue to complete the Twitter deal. Tesla will report third-quarter results on October 19, when the company's shares are likely to rise, providing Musk with a crucial cash-out opportunity.

In other words, investors who plan to buy Tesla shares recently may have to take the blame for Mr Musk, who is short of cash and eager to raise money for the Twitter acquisition.

On Tuesday, Musk shocked the market when he announced that he would press ahead with a $44 billion acquisition.

According to the judge's previous arrangement, Twitter and Musk would have held a five-day trial at the Delaware Court of Chancery (Delaware Court of Chancery) on October 17. Musk had been widely expected to lose the case. On Oct. 6, Delaware Chancery Judge Catherine McCormick (Kathaleen McCormick) ruled that the acquisition of Elon Musk and social media Twitter would be suspended and asked both parties to complete the deal by 5 p.m. on October 28. If the deal is not completed by then, the trial will reopen in November.

Before the final deadline for completing the deal, Mr Musk could start raising the rest of the $33.5 billion stake he had promised and finalise financing for the $12.5 billion of debt needed. But for now, the time window from October 19 to October 28 is very short.

The market warned that Gary Black, a portfolio manager at Future Fund, had always been bullish on Tesla, but he was critical of the Twitter deal from the start.

Although he estimates that Musk has cashed in $15.4 billion worth of Tesla shares, Blake believes it is still possible for Musk to sell more shares, and he will look for favorable opportunities in the market to sell more shares to unwitting investors.

"he also needs to sell a total of $5 billion of Tesla shares to finance the deal, but this is impossible because the window for Tesla's current round of big trading will not end until October 19," Blake said. "

This is based on the fact that Musk already owns about $3.6 billion of Twitter stock. In addition, wealthy third-party investors such as Alwaleed Bentalar (Alwaleed bin Talal) from Saudi Arabia and Oracle founder Larry Ellison will have to spend all $7.1 billion on external investment without breaking a promise made at the beginning of May.

If they back out, Mr Musk may have to spend more money to close the deal.

The problem with the sudden stock sell-off is that it will not be easy to raise so much cash in a short period of time, especially if the Fed continues to tighten credit markets despite the risk of recession.

Musk's huge wealth is mainly concentrated in his shares in Tesla, Tesla's largest single shareholder. Musk has long used the value of shares as collateral to borrow in order to avoid high capital gains tax.

But to finance the Twitter acquisition, Musk has twice chosen Tesla's share price to sell at a relatively high price.

The first time was at the end of April this year, after which Musk promised not to plan to continue to sell Tesla shares. But that commitment only lasted about three months, and then he sold more shares without warning.

"I don't want to do that. But if Twitter really forces me to complete the deal and some equity partners fail to reach a consensus, it is important to avoid an emergency sell-off of Tesla shares," Musk explained in August.

Every time Musk sells Tesla shares, it is immediately after the lock period. First Tesla released his first-quarter results, then the shareholders' meeting, and each deal was completed at a high share price. Measured by the split of Tesla's shares in August this year, Musk's current Tesla share price is more than $300 each time.

If necessary, the next time Mr Musk can cash in Tesla shares is after the release of third-quarter results on October 19. Bears expect him to do everything he can to push up Tesla's share price ahead of the earnings release.

The possibility of a sudden push up is mainly because Tesla's share price is against Musk this week.

First, after a six-week delay, the prototype Tesla robot released on Friday performed mediocre, and the number of electric cars delivered to customers in the third quarter was unusually lower than the market expected.

The combination of these factors caused Tesla shares to record their biggest one-day decline in months this week.

Tesla's market capitalization has fallen by 1/10 since last Friday. The lower the share price falls, Mr Musk may need to sell more shares to meet the financing requirements.

In addition, after years of waiting, Musk announced late Thursday that the Tesla electric truck Semi will finally go offline. The first trucks are scheduled to be shipped to PepsiCo in December, at least a year behind schedule.

Nate Anderson, head of short seller Hindenburg Research (Hindenburg Research), said the announcement might have something to do with the timing of Musk's Twitter deal. "the timing of the announcement is great," he wrote. "I wonder if he needs to sell some Tesla shares to raise money for something."

More pranks and delays at present, the outcome of the legal dispute between Twitter and Musk remains unstable. Although Mr Musk promised to implement the acquisition agreement by the end of this month, there was no sign that the two sides were certain that there would be no more lawsuits.

Twitter became more cautious after being fucked twice by Musk.

For the first time, Musk broke his promise to join the board. He threatened Twitter's board of directors to sell its stake in Twitter to drive down the share price if it did not accept his offer.

For the second time, Musk subsequently announced his withdrawal from the deal in July.

"now that it's time for the trial, the defendants announced that they were finally going to close the deal. 'trust us,' they said,'We're serious this time,'" the Twitter legal team wrote on Thursday.

In addition, if six lenders, including Morgan Stanley and Bank of America, withdraw debt financing, Mr Musk can still evade the deal for a small price and a $1 billion break-up fee. While most experts believe there is little reason for lenders to do so, Twitter says there is no clear commitment.

"just this morning, a corporate representative of a lending bank testified that Musk had not sent them a loan notice or otherwise communicated to them that he intended to close the deal, let alone the exact time," Twitter wrote.

So Twitter said Musk's postponement of the deal until October 28 was just "more pranks and procrastination". Twitter wants the court to hold Musk legally liable to ensure that he does live up to the promises he has made. As Tesla is about to release third-quarter results, Musk's time window for cashing out stocks is getting closer and closer. As long as Twitter distrusts the fickle Tesla chief executive, investors in Tesla's stock may also need to be vigilant.

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