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Elon Musk sells $7bn of Tesla stake in case Twitter bid closes

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Tesla head Elon Musk. Photo: Maja Hitij/Getty Images

Tesla head Elon Musk. Photo: Maja Hitij/Getty Images

Tesla head Elon Musk. Photo: Maja Hitij/Getty Images

Elon Musk offloaded $6.9bn (€6.7bn) worth of stock in Tesla to accumulate cash ahead of a trial that could force the billionaire to follow through on an agreement to acquire Twitter.

Tesla’s chief executive officer sold about 7.92 million shares over three days of trading, according to regulatory filings. Mr Musk, who still owns almost 15pc of the electric-car maker, tweeted that he was done selling and would buy Tesla shares if the Twitter deal doesn’t close.

“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,” Mr Musk wrote.

Tesla rose 3pc to $875.51 on Wednesday in New York, while Twitter climbed 3.2pc to $44.19.

Mr Musk has now dumped about $32bn worth of Tesla shares since November.

The world’s richest person said less than four months ago he had no further stock sales planned and has attempted since then to terminate his $44bn acquisition of Twitter. The social media company has sued to force Mr Musk to go through with the deal, and a trial is scheduled for October.

“He is cashing up for Twitter,” said Charu Chanana, a strategist at Saxo Capital Markets in Singapore, who believes Mr Musk may be trying to take advantage of Tesla shares rebounding about 35pc since late May.

“The bear market rally has started to falter, and further repricing of Fed expectations could mean more pain for equities ahead, especially in tech.”

Investors had been skeptical that Mr Musk, 51, was done offloading Tesla stock, with 68pc of 1,562 respondents to an MLIV Pulse survey saying last month he was likely to sell more regardless of what happens with the Twitter deal.

“Musk said at the Tesla shareholder meeting that any weakness in the share price was a buying opportunity, and then 24 hours later started selling stock himself,” said Jim Dixon, a senior equity sales trader at Mirabaud Securities. It’s “very unlikely” Musk is done offloading the stock, Mr Dixon said.

Tesla’s market fortunes have been tied to the Twitter deal since Mr Musk made his surprise overtures in April. The carmaker’s shares initially slumped out of concern the pursuit would distract him and the risk associated with the margin loan he intended to take out against his Tesla stake.

The stock rallied when Mr Musk abandoned the borrowing plan and after he said he wanted to terminate the deal.


 

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