Musk sells $6.9 billion worth of Tesla shares as Twitter deal likely forced

August 10 (Reuters) – Tesla Inc (TSLA.O) CEO Elon Musk has sold $6.9 billion worth of shares in the electric car maker, saying the money could be used to fund a potential Twitter deal if he loses a legal battle with the social media platform.

“In the event (which we hope unlikely) that Twitter forces this deal to close *and some equity partners haven’t concluded, it is important to avoid an emergency sale of Tesla stock,” he said in a tweet late Tuesday.

Shares of the microblogging site are up 3.5% to $44.35 in early trading, but it’s still well below Musk’s bid price of $54.20 per share. Tesla shares rose nearly 4% to $882.

Musk in early July tore up his April 25 agreement to buy Twitter for $44 billion. Twitter sued Musk to force him to complete the deal, rejecting 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 tech stocks’ plunge. The two sides will be tried on Oct. 17.

After announcing the share sale on Tuesday, Musk took to Twitter and said “yes” when asked if he had finished selling Tesla shares, adding that he would buy them back if the Twitter deal didn’t close.

“Removing the risk of “fiery selling,” the fact that Musk has already raised cash in the event a Twitter decision is made against him and the comment that he would buy back shares if the Twitter deal was dropped, all lead to a positive bias for Tesla,” said Mark Taylor, a sales trader at Mirabaud. Securities.

Tesla did not immediately respond to a Reuters request for comment, while Twitter declined to comment.

The stock sale comes shortly after Musk announced at the company’s annual general meeting that Tesla was a “buying opportunity.”

“Selling Elon (Tesla shares) over the past three days significantly increases the odds of completing a (Twitter) deal, albeit at a slightly lower price of $50-$51 a share,” Gary Black, managing partner at Future Fund LLC, said in a statement. tweet.

Musk, the world’s richest person, sold $8.5 billion worth of Tesla stock in April, and said at the time that there were no plans for further sales.

But since then, legal experts have suggested that if Musk is forced to complete the takeover or settle the dispute with a severe penalty, he will likely sell more Tesla shares.

Dan Ives, an analyst at Wedbush, said the possibility of Twitter getting a $5 billion to $10 billion settlement from Musk is starting to roll into the social media company’s stock.

Musk sold about 7.92 million shares between August 5 and August 9, and now owns just under 15% of the automaker, according to Reuters calculations. The latest sales brought Musk’s total Tesla sales to nearly $32 billion in less than one year.

Musk also joked on Tuesday that he could start his own platform on social media. When asked by a Twitter user if he would consider creating his own platform if the deal didn’t close, he replied: “X.com”

He also tweeted that Tesla will begin shipping the longer-range and more expensive version of its battery-powered semi-commercial truck this year.

The 500-mile truck is expected to cost $180,000, although it is eligible for a tax break of up to $40,000 under the US Senate approved subsidy program.

Tesla announced plans for the Semi in 2017 but its launch and deliveries volume for companies including PepsiCo Inc (PEP.O)Delayed due to issues with the availability of the new 4,680 battery cells. (https://bit.ly/3p9U2i8)

Tesla shares are up nearly 15% since the automaker reported better-than-expected earnings on July 20.

Additional reporting by Hyungju Jin in San Francisco, Akrit Sharma, Medha Singh and Sruthi Shankar in Bengaluru; Additional reporting by Shubham Kalia and Shivam Patel. Editing by Edwina Gibbs, Sweta Singh and Anil de Silva

Our criteria: Thomson Reuters Trust Principles.