Tesla Inc. CEO Elon Musk sold shares for $6.9 billion, saying the proceeds might be used to fund a potential purchase of Twitter if he loses a legal battle with the social media platform.
It is essential to prevent an emergency Tesla stock sale, in the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners fail to materialize, the author stated in a tweet late on Tuesday.
In early trading, the microblogging platform’s shares increased 3.5% to $44.35 but remained substantially below Musk’s offer price of $54.20 per share. At $882, Tesla stock was up roughly 4%. Musk broke his commitment to pay $44 billion to acquire Twitter at the beginning of July. Musk’s claim that he was deceived about the number of spam accounts on the social media platform has been dismissed by Twitter as buyer’s remorse following a decline in technology stocks. To force Musk to complete the acquisition, Twitter has filed a lawsuit. The trial for the two parties will begin on October 17.
When questioned on Twitter if he was done selling Tesla stock after the announcement of the share sale on Tuesday, Musk responded “yes,” adding that he would buy it again if the Twitter acquisition did not go through. According to Mark Taylor, a sales trader at Mirabaud Securities, “the removal of the ‘firesale’ risk, the fact that Musk has already raised cash in case a Twitter decision goes against him, and the comment that he’ll buy back stock if the Twitter deal gets dropped all build into a positive bias for Tesla.
A Reuters request for comment was not immediately answered by Tesla, and Twitter declined to comment. The stock sale happens soon after Musk stated that Tesla was a ‘buying opportunity’ during the company’s annual general meeting. Gary Black, the managing partner of Future Fund LLC, tweeted that Elon’s selling of (Tesla shares) over the previous three days considerably boosts the probability the (Twitter) deal gets done, although at a slightly lower price of $50-$51/share.
The world’s richest man, Elon Musk, sold $8.5 billion worth of Tesla shares in April, and he had previously stated that no additional sales were planned. However, since then, legal experts have projected that Musk would undoubtedly sell more Tesla stock if he were compelled to finish the acquisition or face a significant fine for the incident. According to Wedbush analyst Dan Ives, the probability that Twitter would get a $5 billion to $10 billion settlement from Musk has already begun to be taken into account by the shares of the social media business.
According to estimations by Reuters, Musk currently owns just under 15% of the company after selling 7.92 million shares between August 5 and August 9. Musk has now sold about $32 billion worth of Tesla stock in less than a year with the most recent sales.
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