musk: Here's what CEO Elon Musk has to say on selling USD6.9 billion worth of Tesla shares
"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.
Shares of the microblogging site rose 3.5 percent to USD44.35 in premarket trading, but were still trading significantly below Musk's offer price of USD54.20 per share. Tesla shares were up 1.6 percent at USD863.1.
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Musk, in early July, tore up his April 25 agreement to buy Twitter for USD44 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, 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 the Twitter deal gets dropped, all build into a positive bias for Tesla," said Mark Taylor, sales trader at Mirabaud Securities.
The stock sale comes shortly after Musk said at the company's annual general meeting that Tesla was a "buying opportunity."
"Elon's sale of (Tesla shares) over the past three days significantly increases the odds the (Twitter) deal gets done, albeit at a slightly lower price of USD50-USD51/share," Gary Black, managing partner of Future Fund LLC, said in a tweet.
Musk, the world's richest person, sold USD8.5 billion worth of Tesla shares in April and had said at the time there were no further sales planned. But since then, legal experts have suggested that if Musk were forced to complete the acquisition or settle the dispute with a stiff penalty, he was likely to sell more Tesla shares.
Musk sold about 7.92 million shares between Aug.5 and Aug.9, and now owns just under 15% of the automaker.
The latest sales bring total Tesla stock sales by Musk to about USD32 billion in less than one year.
Tesla shares have risen nearly 15 percent since the automaker reported better-than-expected earnings on July 20, also helped by the Biden administration's climate bill that, if passed, would lift the cap on tax credits for electric vehicles.
Musk also teased on Tuesday that he could start his own social media platform. When asked by a Twitter user if he had thought about creating his own platform if the deal didn't close.
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