Elon Musk has sold nearly $7billion (£5.8billion) of Tesla shares as the world’s richest man tries to get his finances in order ahead of his court battle with Twitter.
Musk has unloaded about eight million shares in recent days, a series of regulatory filings revealed.
“In the (hopefully unlikely) event that Twitter forces this deal through and certain financial partners don’t materialize, it’s important to avoid a fire sale of Tesla stock,” Musk tweeted on Tuesday. evening.
Musk is by far the largest individual shareholder of Tesla and Twitter. Tesla shares rose nearly 2% ahead of the Wall Street opening bell on Wednesday.
Shares of Twitter, meanwhile — already up 16% over the past month, with most observers believing Musk faces a long chance of success in court — jumped a further 3%.
Musk hit back at Twitter last week, accusing the company of fraud over its failed $44bn (£36.4bn) acquisition. He claims Twitter withheld critical information and misled his team about the size of its user base.
Musk alleges Twitter committed fraud, breach of contract and violation of securities law in Texas, where he now lives, after moving from California where auto and environmental laws are more stringent. strict.
In a surprise move in April this year, Musk offered to buy Twitter before trying to pull out of the deal within weeks, saying the social platform was plagued with more “spam.” bots” and fake accounts that Twitter had revealed. .
Musk said he doesn’t expect a major sale of his Tesla stake after securing funding to acquire Twitter, but Dan Ives, an industry analyst at Wedbush, said Wednesday that “the picture has changed dramatically.”
Wedbush raised its price target for Twitter shares, “with the odds of a Twitter deal now more likely in our view and the street seeing through this Musk poker move,” Ives wrote to clients.
“We may also see Musk trying to resolve this powder keg situation before the Twitter deal formally goes to court in October,” he added.
“At a minimum, we see Twitter getting a massive settlement from Musk in the $5 billion (£4.1 billion) at $A range of 10 billion (£8.2 billion) that is starting to factor into the stock.
Musk began his massive investment in Twitter in January this year. On March 14, his stake in the company exceeded 9.2%, making him the largest shareholder. On April 4, in a required securities filing, Musk disclosed his majority stake in Twitter, which responded by offering him a place on its board, in a bid to appease Musk and avoid a takeover. hostile.
On April 10, Musk confirmed that he would not accept the board’s offer, and instead, on April 14, he offered to buy Twitter outright at $54.20 per share, a way ultimately leading to the social media platform being taken into its private ownership.
However, in early July, following a series of accusations and responses between Musk and Twitter, the potential buyer announced that as far as he was concerned, the deal was dead.
Unfortunately for Musk, a billion dollar termination fee is hardwired into the acquisition contract. On July 12, Twitter sued Musk in Delaware to force him into the deal he had tried so aggressively, arguably impulsively, to close just three months earlier.
In his lawsuit, Twitter said, “Musk is refusing to honor his obligations to Twitter and its shareholders because the agreement he signed no longer serves his personal interests. Musk apparently believes that he – unlike all other parties subject to Delaware contract law – is free to change his mind, destroy the company, disrupt its operations, destroy shareholder value and harm himself. go.
The case continues.
Sign up for the E&T News email to get great stories like this delivered to your inbox every day.