Musk raises $10 billion ahead of Twitter showdown
Elon Musk has sold nearly $US7 billion ($9.9 billion) worth of shares in Tesla he gets his finances in order ahead of his court battle with Twitter.
Mr Musk disclosed in a series of regulatory filings that he had unloaded about eight million shares in his electric-vehicle company in recent days.
“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 tweeted late on Tuesday (US time).
Mr Musk is by far the largest individual shareholder in Tesla and Twitter.
Shares of Tesla rose 4 per cent to close Wednesday at $US883.07. Shares in Twitter jumped 3.7 per cent to close at $US44.43, and are up 36 per cent since July 11, with most believing Mr Musk faces long-shot odds of success in court.
Mr Musk countersued Twitter last week, accusing the company of fraud over his aborted $US44 billion acquisition.
He claimed Twitter held back critical information and misled his team about the size of its user base.
Mr Musk alleges Twitter committed fraud, breach of contract and violation of a securities law in Texas, where Mr Musk lives.
Mr Musk offered to buy Twitter earlier this year, then tried to back out of the deal claiming the social platform was infested with a larger numbers of ‘spam bots’ and fake accounts than the social media company had disclosed.
Mr Musk said in the northern spring he planned no major sales of his stake in Tesla after lining up financing to acquire Twitter. But Dan Ives, an industry analyst with Wedbush, said on Wednesday “the situation has dramatically changed”.
Wedbush has raised its target price for shares of Twitter.
“The chances of a Twitter deal [are] now more likely in our opinion, and the Street seeing through this poker move by Musk”, Mr Ives wrote to clients, referring the US financial hub of Wall Street.
“We can also see Musk trying to resolve this powder keg situation before the Twitter deal officially heads to court in October,” he wrote.
“At a minimum, we see Twitter getting a massive settlement from Musk in the $5 billion to $10 billion range that is starting to be factored into the stock.”