Tesla Chief Executive; Elon Musk has sold $6.9 billion (€6.7 billion) of shares in Tesla as the billionaire says the funds could be used to finance a potential Twitter deal if he loses a legal battle with the social media platform.
He has removed about 8 million shares in recent days, a series of regulatory filings revealed.
“In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late on Tuesday.
So far, Musk is the largest individual shareholder in Tesla and Twitter. Shares of the microblogging site rose 3.5 percent to $44.35 in early trading but were still significantly below Musk’s offer price of $54.20 per share. Tesla shares were up nearly 4 percent at $882.
Shares of Twitter, up 16% in the past month with most believing Musk faces long-shot odds of success in court, jumped another 3%.
According to AP, Musk countersued Twitter last week, accusing the company of fraud over his aborted $44 billion acquisition. He claimed Twitter held back critical information and misled his team about the size of its user base.
Musk alleges that Twitter committed fraud, breach of contract, and violation of a securities law in Texas, where he lives. Musk offered to buy Twitter earlier this year before trying to back out of the deal, claiming the social platform was infested with larger numbers of “spam bots” and fake accounts than Twitter had disclosed.
Musk said in the spring that he planned no major sales of his stake in Tesla after lining up financing to acquire Twitter, but Dan Ives, an industry analyst with Wedbush, said on Wednesday that “the situation has dramatically changed”.
Wedbush raised its target price for shares of Twitter, “with the chances of a Twitter deal now more likely in our opinion and the Street seeing through this poker move by Musk,” Mr. Ives wrote to clients.
“We can also see Musk trying to resolve this powder keg situation before the Twitter deal officially heads to court in October,” he wrote.
“At a minimum, we see Twitter getting a massive settlement from Musk in the $5 billion to $10 billion range that is starting to be factored into the stock.”
Musk also teased on Tuesday that he could start his own social media platform. When asked by a Twitter user if he had thought about creating his platform if the deal did not close, he replied: “X.com”
He also tweeted that Tesla would begin shipping the longer-range and higher-cost version of its battery-powered Semi commercial truck this year. The 500-mile range truck is expected to cost $180,000, although it would qualify for a tax break of up to $40,000 under a U.S. subsidy program that was approved by the U.S. Senate.