By Tom Brown for MailOnline
Elon Musk has sold nearly $7 billion worth of Tesla stock, according to legal documents released Tuesday, in an effort to prevent a fire if he is forced to buy Twitter in a lawsuit set to take place in October.
The Tesla boss sold some 7.9 million shares between August 5 and 9, according to documents published on the Securities and Exchange Commission website.
He now owns 155.04 million Tesla shares, or just under 15% of the automaker, according to Reuters.
“In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners fail, it’s important to avoid an emergency sale of Tesla stock,” Musk, the world’s richest man, wrote on Twitter on Tuesday.
The money could serve as insurance in case Musk is forced to buy Twitter, a company he originally agreed to buy and then walked out on.
Musk, the world’s richest man, has most of his wealth in automaker Tesla — but if a court were to rule against him, the stock price could plummet.
Dan Ives, an analyst at Wedbush Securities, said investors will now see the chance of a Twitter deal as “more likely.”
His dispute with Twitter started when Musk bought a 9.1% stake in the company, a move that may have violated security laws, and then signed an agreement on April 25 to buy the social media giant.
Musk said his recent decision to sell millions of Tesla shares is “to avoid an emergency sale of Tesla shares”
But in early July, Musk tore up his deal to buy Twitter for $44 billion after technology stocks in the United States began to fall in price, including Tesla’s.
Twitter then sued Musk to force him to complete the transaction, dismissing his claim that he had been misled about the number of spam accounts on the social media platform as a buyer’s regret in the wake of a plunge in technology stocks.
Musk has sued, accusing Twitter of fraud, alleging that the social media platform misled him about important aspects of his company before agreeing to a $44 billion buyout.
The two sides are now locked in a legal battle over Musk’s bid to relinquish the April deal to buy the company, and a judge has ordered a trial to begin October 17.
The move comes after Musk sold $8.5 billion worth of shares in the electric carmaker in April as he prepared to fund the Twitter deal.
He tweeted at the time, “No further TSLA sales planned after today.”
Musk sold $8.5 billion worth of shares in the electric car maker in April as he prepared to fund the Twitter deal. Now he’s gearing up for a fire sale in case he’s forced to take over Twitter
But since then, legal experts have suggested that if Musk is forced to complete the acquisition or settle the dispute with a hefty fine, he is likely to sell more Tesla stock.
Tesla shares are up nearly 15% since the automaker reported better-than-expected earnings on July 20, also helped by the Biden government’s climate bill that, if passed, would lift the limit on tax credits for electric vehicles.
Musk also teased Tuesday that he could start his own social media platform. When asked by a Twitter user if he’d thought about creating his own platform if the deal didn’t close, he replied, “X.com.”