Elon Musk offloaded $6.9 billion of stock in Tesla Inc., the billionaire’s biggest sale on record, saying he wanted to avoid a last-minute selloff of the electric-car maker’s shares in the event he is forced to go ahead with his aborted deal to buy Twitter Inc.
Asked by followers if he was done selling Tesla shares and would buy the stock again if the deal doesn’t close, Musk responded: “Yes.”
The sale comes just four months after Musk, the world’s richest person, said he had no further plans to sell shares in the carmaker he’s built into a global force after disposing of $8.5 billion of stock in the wake of his initial offer to buy Twitter. Since then, Tesla’s shares have rebounded from lows reached in May, benefiting from broader gains in US equities.
Musk May Keep Selling Tesla, With or Without Twitter: MLIV Pulse
Tesla shares have risen about 35% from this year’s lows, though are still down about 20% this year.
Tesla’s market fortunes have been tied to those of the Twitter deal since Musk made his surprise overture earlier this year.
The billionaire last month said he was terminating the agreement to buy the social network where he has more than 102 million followers and take it private, claiming Twitter has made “misleading representations” over the number of spam bots on the service. Twitter has since sued to force Musk to consummate the deal, and a trial in the Delaware Chancery Court has been set for October.
At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.”
The Twitter deal included a provision that if it fell apart, the party breaking the agreement would pay a termination fee of $1 billion, under certain circumstances. Legal experts have debated whether the conflict over spam bots is enough to allow Musk to walk away from the deal.
Commenting before Musk’s tweets clarifying the reason for the sale, Gene Munster, managing partner of Loup Ventures, said he put the odds of the tycoon buying Twitter at 75%.
“I’m shocked,” Munster said. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”
Musk’s $250.2 billion fortune is the world’s largest, according to the Bloomberg Billionaires Index, but his wealth has fallen around $20 billion this year as Tesla shares declined.
The carmaker’s shareholders approved a three-for-one stock split last week, a move designed to attract an even larger number of retail investors given the shares’ recent rebound. Tesla’s better-than-expected second-quarter earnings have been a tailwind, along with landmark US climate change legislation that aims to boost the use of clean energy through a series of tax incentives.