Elon Musk has sold roughly $7 billion in Tesla stock in order to get his finances in shape ahead of a legal fight with Twitter. In a series of regulatory papers, the billionaire stated that he just sold almost 8 million shares of the electric car producer.
“It is critical to prevent an emergency sale of Tesla shares in the (hopefully improbable) case that Twitter compels this transaction to complete and certain equity partners do not come through,” Musk, Tesla’s creator and CEO, tweeted late Tuesday.
Musk is by far Tesla and Twitter’s greatest individual shareholder.
Tesla stock surged almost 2% before the market opened on Wednesday. Twitter shares have risen 16% in the last month, with most analysts assuming Musk has a slim chance of winning in court.
Musk countersued Twitter last week, accusing the business of deception in connection with his failed $44 billion takeover. He alleged that Twitter withheld vital information and deceived his staff about its user base size.
Twitter is accused of fraud, breach of contract, and violation of a securities law in Texas, where Musk resides.
Musk made a bid to acquire Twitter earlier this year, but then sought to back out of the agreement, alleging the social site was riddled with more “spam bots” and bogus accounts than Twitter had reported.
Musk said in the spring that he had no plans to sell a significant portion of his Tesla stock after securing finance to purchase Twitter, but Dan Ives, an industry analyst with Wedbush, stated on Wednesday that “the situation has radically altered.”
Wedbush boosted its target price for Twitter shares, writing to investors, “With the odds of a Twitter transaction now more plausible in our view and the Street seeing through Musk’s poker play.”
“We may also see Musk attempting to defuse this explosive issue before the Twitter agreement goes to court in October,” Ives added. “At the very least, we envision Twitter receiving a significant settlement from Musk in the $5 billion to $10 billion area, which is already being incorporated into the stock.”