Musk sells $6.9 billion worth of Tesla stock, hints at potential Twitter deal

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

“If Twitter is forced to close this deal (unlikely) and some equity shareholders don’t come through, it’s important to avoid a rush sell of Tesla stock,” he said in a tweet late Tuesday.

Shares of the microblogging platform rose 3.5% to $44.35 in premarket trading, but were trading below Musk’s offer price of $54.20 a share. Tesla shares rose 1.6% to $863.1.

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In early July, Musk closed his April 25 deal to buy Twitter for $44 billion. Twitter has sued Musk to end the transaction, after the tech stock plunged after he dismissed claims he was misled about the number of spam accounts on the social media site as buyer’s remorse. Both parties are scheduled to appear in court on Oct. 17.

Following the announcement of the stock sale on Tuesday, Musk took to Twitter and said “yes” when asked if he had sold Tesla stock, saying he would buy it back if the Twitter deal didn’t go through.

“Eliminating the risk of a ‘firesale’, the fact that Musk has already raised cash in case the Twitter decision goes against him, and the idea that he will buy back stock if the Twitter deal falls through is a plus for Tesla,” said Mark Taylor, a sell-side trader at Mirabad Securities.

Tesla did not immediately respond to a Reuters request for comment.

Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony on January 7, 2019 in Shanghai, China. REUTERS/Aly Song

The stock selloff comes shortly after Musk called Tesla a “buying opportunity” at the company’s annual general meeting.

“Elon’s (Tesla stock) selloff over the past three days significantly increases the odds of a (Twitter) deal closing, albeit at a slightly lower price of $50-$51/share,” said Gary Black, managing partner at Future Fund LLC. Tweet.

Musk, the world’s richest man, sold $8.5 billion worth of Tesla shares in April and said at the time that the sale was not planned. But since then, legal experts have suggested that Musk is likely to sell more Tesla shares if he is forced to complete the acquisition or settle the dispute with a stiff fine.

Musk sold about 7.92 million shares between Aug. 5 and Aug. 9, according to Reuters calculations.

The latest sale brings Musk’s total Tesla stock sales to about $32 billion in less than a year.

Tesla shares have risen nearly 15% since the automaker posted better-than-expected earnings on July 20, helped by the Biden administration’s climate bill, which, if passed, would increase tax credits for electric vehicles.

On Tuesday, Musk teased that he might launch his own social media platform. Asked if the Twitter user had thought about starting his own site if the deal didn’t go through, he replied: “X.com.”

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Reporting by Hyunjoo Jin in San Francisco and Akriti Sharma, Medha Singh and Shruti Shankar in Bangalore; Additional reporting by Shubham Kalia and Shivam Patel; Editing by Edvina Gibbs and Anil de Silva

Our Standards: Thomson Reuters Trust Principles.

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