Elon Musk, CEO of Tesla Inc, sold nearly $7 billion worth of shares in the electric vehicle manufacturer, stating that the funds may be used to fund a prospective Twitter takeover if he loses a legal dispute with the social media platform.
On Wednesday, Tesla shares were down 2.44%, but after-hours trading has been quite relatively stable, which indicates that the stock sales have yet to affect the company's share price.
"It is critical to avoid an emergency sale of Tesla stock in the (hopefully improbable) event that Twitter compels this deal to close and some equity partners don't come through," the billionaire tweeted late on Tuesday.
Musk tore up his April 25 agreement to purchase Twitter for $44 billion at the beginning of July. Twitter has filed a lawsuit against Musk to compel him to finish the acquisition, dismissing his allegation that he was deceived about the amount of spam accounts on the social media site. The two parties will go to trial on October 17.
Dan Ives, an analyst at Wedbush Securities, tweeted, "The market will see this poker play as increasing the likelihood of a Twitter deal."
Musk responded "yes" when asked if he was done selling Tesla stock, and also stated that he would purchase Tesla stock again if the Twitter acquisition did not close.
Musk, the richest person in the world, sold $8.5 billion worth of Tesla shares in April and stated at the time that no additional sales were planned.
Since then, however, legal experts have predicted that Musk is likely to sell more Tesla shares if he is forced to complete the acquisition or resolve the case with a hefty fine.
Between August 5 and August 9, Musk sold around 7.92 million shares, according to various documents. Based on calculations by experts, he currently holds 155,04 million Tesla shares, which represents slightly under 15% of the firm.
The most recent sales raise Musk's total sales of Tesla stock in less than a year to over $32 billion.
Since the company reported better-than-expected earnings on July 20, Tesla shares have climbed about 15%, aided by the Biden administration's climate policy that, if implemented, would increase tax incentives for electric vehicles.
Musk implied on Tuesday that he may launch his own social media network. When a Twitter user inquired if he had considered launching his own platform if the sale did not go through, he responded, "X.com."