Elon Musk, the chief executive of the electric vehicle maker Tesla, has sold about $7 billion worth of the company’s stock, a move he said on Twitter was an effort to raise cash in case he is forced to complete his $44 billion deal to acquire the social media company.
The sale of 7.92 million Tesla shares were made starting on Aug. 5, he revealed Tuesday in securities filings, a reversal from his previous statements that he would not sell additional shares to finance the Twitter deal.
Mr. Musk signed the deal in April to acquire the social media company only to announce months later his intent to pull out, citing concerns about its accounting of fake users. His hesitancy coincided with a deep plunge in shares of technology companies, including Tesla, the primary source of his wealth.
Twitter has sued Mr. Musk to force him to close the deal through a provision of the contract known as “specific performance.” A judge in the Delaware Chancery Court will decide in October whether he must follow through on the acquisition.
In a tweet on Tuesday, Mr. Musk said that he sold the shares 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.” Mr. Musk is the richest man in the world, but much of his wealth is tied up in shares of the electric vehicle company. He also said Tuesday he would buy more Tesla stock if his deal to buy Twitter did not close.
In April, Mr. Musk sold about $8.5 billion shares in Tesla to help fund the deal, before tweeting had no further sales planned.
Shares of Twitter were up 2.8 percent in early trading, though still far below the $54.20 a share that Mr. Musk has offered for the company. Shares of Tesla were up less than 1 percent.
In addition to about $13 billion in debt financing, Mr. Musk said in May would pay for the Twitter acquisition with about $33.5 billion in cash, through a combination of his own funds, outside investors and partnership with other Twitter shareholders. He had already signed a list of Silicon Valley heavyweights — including the venture capital firm Andreessen Horowitz and the tech mogul Larry Ellison — to commit about $7.1 billion toward the deal. Other backers include cryptocurrency companies, family offices, sovereign wealth funds, property firms and mutual fund companies.
Many of those backing Mr. Musk’s bid have been subpoenaed by Twitter in an increasingly bitter courtroom proceeding.
Mr. Musk has cast doubt on the way that Twitter accounts for its number of fake users. Twitter has defended its process, which it says includes proprietary and confidential information.
Over the past few weeks, both Twitter and Mr. Musk have sparred over details of the deal. Mr. Musk unveiled his counterclaims last week against Twitter, accusing the social media company of “fraud” and forcing him into a sale. Twitter’s chairman, Bret Taylor, called his claims “factually inaccurate, legally insufficient and commercially irrelevant.”
At the same time, Mr. Musk has appeared to strike a more open tone toward the possibility of going through with the deal. At Tesla’s investor day last week, he spoke about the changes he would make at Twitter should he run it.
On Saturday, he tweeted: “If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms.”
Still, Mr. Musk appears intent on keeping multiple doors open. In response to a question on Twitter about whether he would create his own social platform if the deal does not close, he responded “X.com.” Mr. Musk, who has an affinity for the letter “X,” has spoken about a desire to create a rival service. Twitter has cited that possibility as reason to resist Mr. Musk’s demands for confidential information pertaining to how it accounts for fake users.
Many legal analysts have said that Twitter’s argument is stronger than Mr. Musk’s, but they have questioned whether a judge would be willing to order him to close the deal, with the risk that he might not follow through, given Mr. Musk’s habit of flouting legal confines.
His sale of Tesla stock may mitigate those worries, said Ann M. Lipton, a professor of corporate governance at Tulane Law School.
“The sales make clear he intends to honor court orders,” she said.