Elon Musk has sold $6.9bn (£5.7bn) worth of shares in Tesla after admitting that he could need the funds if he loses a legal battle with Twitter and is forced to buy the social media platform.
The Tesla chief executive walked away from a $44bn deal to buy Twitter in July but the company has launched a lawsuit demanding that he complete the deal. A trial will take place in Delaware in October.
“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,” Musk said in a tweet late on Tuesday.
In other comments on Twitter on Tuesday, Musk said “yes” when asked if he was finished selling Tesla stock. He also said he would buy Tesla stock again if the Twitter deal does not close.
The move came as observers of the Twitter row speculated whether Musk will seek a settlement. Legal experts have said that Musk will struggle to win his case, having signed an agreement to buy the business, leaving him with the option of offering Twitter a substantial settlement to head off the threat of being ordered to spend $44bn on a company he no longer wants to buy.
“I think he realises that he is going to lose or be forced to pay not just hefty legal fees but also for damages to the company. So I think that these are signs that he does intend to settle sometime soon,” said Anat Alon-Beck, a law professor at Case Western Reserve University in Ohio.
Musk has committed more than $30bn of his own money to the financing of the deal, with more than $7bn of that total provided by a coterie of associates including the tech tycoon Larry Ellison, the Qatar state investment fund and the world’s biggest cryptocurrency exchange, Binance.
Musk, the world’s richest person, sold $8.5bn worth of Tesla shares in April and had said at the time there were no further sales planned. But since then, legal experts had suggested that if Musk is forced to complete the acquisition or settle the dispute with a stiff penalty, he was likely to sell more Tesla shares.
Last week Musk launched a countersuit against Twitter, accusing the platform of deliberately miscounting the number of spam accounts on the platform. Twitter has consistently stated that the number of spam accounts on its service is less than 5% of its user base, which stands at just under 238 million. Legal experts have said that Musk will find it hard to convince a judge that Twitter’s spam issue represents a “company material adverse effect” that substantially alters the company’s value – and therefore voids the deal.
Musk sold about 7.92m Tesla shares between 5 August and 9 August, according to multiple filings. He now owns 155m Tesla shares, or just under 15% of the electric carmaker.
The latest sales bring total Tesla stock sales by Musk to about $32bn in less than a year. However, Musk remains comfortably ahead of Jeff Bezos as the world’s richest man with an estimated $250bn fortune, according to the Bloomberg billionaires index.
Tesla shares have risen nearly 15% since the carmaker reported better-than-expected earnings on 20 July, 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 did not close, he replied: “X.com”.
Reuters contributed to this report
