Elon Musk is, according to the Forbes list, the richest human being on earth. His fortune was valued at the last count at about 245,000 million dollars, but, much of it, is deposited in shares of Tesla, which with the falls of recent months have lowered it considerably. However, the richest man in the world, he has several fronts ahead that could threaten his fortune.
Because no one knows for sure how much money Musk has in liquid form to begin with. The tycoon cemented his proposal to buy Twitter by selling Tesla shares and relying on other investors. He has come to declare himself in some interviews as “cash poor”. Hence, with aspects such as the trial that lies ahead as a result of backing out of the purchase of the social network company, his finances seem compromised.
The trial with Twitter can cost from 1,000 to 44,000 million
Musk and Twitter will face each other in a Delaware court, set for trial in October, which will determine whether or not he needs to spend the money he promised to close the deal.
The court can spoil Musk’s plans by ruling in favor of Twitter and forcing Musk to complete the deal, rather than just pay damages. Musk signed a “specific compliance” clause in the acquisition agreement, but is arguing that Twitter has not shared the information necessary to close the deal. In total, it could cost you from 1,000 million as payment for that compliance, to 44,000 if they forced you to close the purchase.
The Ever Present Threat of the SEC
On the other hand, the SEC has sued and fined him on several occasions. The regulator sued Musk in 2018 after he tweeted that he had raised funding to take Tesla private at a price of $420 a share. Musk settled with the SEC, resigned as chairman, and agreed to have a lawyer oversee all of his Tesla-related tweets (something he has since unsuccessfully fought to have removed in court). “I want to be clear,” Musk told CBS News in 2018. “I don’t respect the SEC. I don’t respect them.”
Now, the SEC is investigating whether Musk and his brother kimbal Tesla stock trading insider trading rules were broken, and is investigating whether Musk broke the law by waiting more than two weeks before reporting that he had bought more than 5% of Twitter stock. All this could also incur new sanctions.
A Tesla shareholder named Luigi Crispo has also sued him.
But Musk has more dark clouds on the horizon. On July 29, a Twitter shareholder named Luigi Crispo sued Musk for breaching his contract with Twitter. and your fiduciary duty to Twitter shareholders. The suit alleges that Musk used “unconvincing arguments to breach his contract” and asks the court to force him to close the deal.
If this lawsuit, also filed in Delaware, gets the class-action status it seeks, it could spell serious trouble for Musk beyond his current fight with Twitter over the terms of the settlement. Above all, if it becomes a class action lawsuit.
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Elon Musk sees his fortune in danger: these are his biggest threats and enemies