Elon Musk threatens to get out of the Twitter partnership.

What exactly is going on with Elon Musk’s Twitter deal?

Musk’s feud with the former employee of SoftBank and the subsequent fallout appears to be rooted in a few things, notably the price of Tesla’s shares during the equity offering and the fact that Tesla’s stock was not traded directly. Musk was upset that the price of Tesla’s shares came in lower during the offering than he expected. And he had hoped to sell shares directly to investors instead of having them go through Wall Street, which would have allowed him to get a higher price per share. The Securities and Exchange Commission (SEC), however, has rules in place that prohibit the trading of shares directly from company CEOs and other key executives. Musk has wanted to find a way around that rule, or at least the way he went about it.

Why is Musk so upset about the SoftBank relationship?

Musk believes his company would have been able to sell shares directly to investors, allowing him to ask for a higher price per share. And he was frustrated that the deal with SoftBank needed to be approved by the regulators. So, he took to Twitter and criticized the relationship, which led to an SEC investigation. In the midst of this investigation, Musk also took a shot at the former employee of SoftBank and his decision to sell his shares during the first day of trading. It’s unclear what exactly triggered Musk’s tweets against the employee.

Can Tesla stay public without a direct share sale?

Technically, yes. Tesla has not officially said it needs to sell shares directly to investors in order to remain public. And, interestingly enough, the company experienced its highest-ever trading volume during the equity offering, which suggests that most shareholders were more than happy to sell their shares. Still, it’s unknown how long Tesla can stay public without a direct share sale, especially given the pressure the company is under to ramp up production for the Model 3, a lower-priced sedan.

Will Musk actually leave Wall Street?

Musk has threatened to leave Wall Street before. He threatened to do so in 2017 when the SEC sought to have him removed as Tesla’s chairman. And he did a similar thing in 2008 when he was trying to take Tesla private. As for this most recent threat, Musk has certainly made it clear that he is not pleased with the way things have been going. And it’s possible that this most recent fight with the former employee of SoftBank is enough to push him over the edge. But don’t be surprised if he doesn’t end up following through.

Bottom line

Musk has been frustrated with the way the equity offering went and the relationships the company has formed with key investors like SoftBank. He wants to sell shares directly to investors so that he can ask for a higher price per share and avoid the regulators. If Musk doesn’t get his way, however, he may decide to leave Wall Street. It’s unclear what would  

Can Tesla stay public without a direct share sale?

Technically, yes. Tesla has not officially said it needs to sell shares directly to investors in order to remain public. And, interestingly enough, the company experienced its highest-ever trading volume during the equity offering, which suggests that most shareholders were more than happy to sell their shares. Still, it’s unknown how long Tesla can stay public without a direct share sale, especially given the pressure the company is under to ramp up production for the Model 3, a lower-priced sedan.

Will Musk actually leave Wall Street?

Musk has threatened to leave Wall Street before. He threatened to do so in 2017 when the SEC sought to have him removed as Tesla’s chairman. And he did a similar thing in 2008 when he was trying to take Tesla private. As for this most recent threat, Musk has certainly made it clear that he is not pleased with the way things have been going. And it’s possible that this most recent fight with the former employee of SoftBank is enough to push him over the edge. But don’t be surprised if he doesn’t end up following through.

Bottom line

Musk has been frustrated with the way the equity offering went and the relationships the company has formed with key investors like SoftBank. He wants to sell shares directly to investors so that he can ask for a higher price per share and avoid the regulators. If Musk doesn’t get his way, however, he may decide to leave Wall Street. It’s unclear what would happen if he did, though. It’s possible that Tesla would need to be acquired or go private. In any case, it’s clear that Musk has had enough of the Wall Street drama and wants to walk away from it. And it’s also clear that he is not pleased with the relationship the company has with SoftBank and the terms of that relationship.