Tesla Inc chief executive officer Elon Musk sold $6.9 billion worth of shares in the electric vehicle maker, saying the funds could be used to finance a potential Twitter deal if he loses a legal battle with the social media platform.
“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,” he said in a tweet late on Tuesday.
Shares of the site rose 3.5 per cent 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% at $882.
Musk in early July tore up his April 25 agreement to buy Twitter for $44 billion. Twitter has sued Musk to force him to complete the transaction, dismissing his claim that he was misled about the number of spam accounts on the social media platform as buyer’s remorse in the wake of a plunge in technology stocks. The two sides head to trial on Oct. 17.
Following the announcement of the share sale on Tuesday, Musk took to Twitter and said “yes” when asked if he was done selling Tesla stock, adding he would buy it again if the Twitter deal does not close.
“The removal of the ‘firesale’ risk, the fact Musk has already raised cash in case of a Twitter decision going against him and the comment that he’ll buy back stock if a Twitter deal gets dropped all builds into a positive bias for Tesla,” said Mark Taylor, a sales trader at Mirabaud Securities.