• Founder and CEO Elon Musk has sold $6.9 billion in TSLA stock.
  • Musk said the sale was to prepare for the possibility he will be forced to buy Twitter.
  • Musk offered $43 billion for the social media platform this spring before reneging on the deal.

Elon Musk's sale of $6.9 billion in Tesla (TSLA) stock in preparation of a court forcing him to complete his buyout of Twitter (TWTR) does not seem to be hurting the stock price all that much. In fact, TSLA shares have advanced 2.9% to $874.41 in Wednesday's premarket, more than compensating for Tuesday's 2.4% sell-off to $850.

Tesla stock news

According to regulatory filings, Musk sold 7.92 million shares of Tesla stock on August 5, last Friday. This amounted to approximately $6.9 billion. Musk said the sale was to have cash at the ready in case the Delaware Chancery Court forces him to go through with his takeover of Twitter. Twitter sued Musk after the Tesla CEO walked back his initial buyout offer. Musk has claimed he did so, because Twitter would not supply him with accurate data on the number of bots on the social media platform.

“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,” Musk wrote.

After accumulating a more than 9% stake in Twitter in the first three months of the year, Musk offered to take it private with a $43.4 billion all-cash offer on April 14. The offer at that time was $54.20 per share, but Musk tried hard to renegotiate the deal after TWTR stock fell to the $30s. Twitter stock is trading up 3.4% in Wednesday's premarket at $44.30, showing that the market remains uncertain whether Musk will be forced to acquire Twitter at the agreed upon price.

Musk has continued bating Twitter, saying that the platform's stance that less than 5% of its users are bots is a lie. Musk has stated in the past that the figure is closer to 20%. Part of Musk's initial April agreement with Twitter was to pay the company $1 billion if the buyout fails to go through.

Tesla stock forecast

Tesla stock sure looks ready to keep diving despite its premarket activity at the moment. The Moving Average Convergence Divergence (MACD) has reduced its separation from the signal line and appears ready to cross over in a bearish signal.

Last week TSLA stock could not break through the $900 to $955 supply zone that acted as resistance in April and May. From a chart-base perspective, TSLA stock should seek support after a failure at resistance. Unfortunately, the only support of note is at the 21-day moving average near $812. TSLA shares already broke through the 9-day moving average on Friday, August 5. Below there is the $780 level that acts as a pivot point between bullish and bearish trends. Longer-term support remains at $620.

 

TSLA daily chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

Disappointing Australian data and a deteriorated market mood weighed on AUD/USD, quickly approaching the 2022 low at 0.6362. RBA’s Financial Stability report coming up next.

AUD/USD News

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

The American dollar maintains a strong upward momentum amid renewed inflation and recession concerns. EUR/USD further retreated after failing to regain parity mid-week.

EUR/USD News

Gold struggling to retain its bullish strength

Gold struggling to retain its bullish strength

XAUUSD shed some ground on Thursday, currently hovering around $1,713.00. The dollar has gathered momentum as Wall Street opened in the red, holding into negative territory at the time. Also, government bond yields resumed their advances and hold near fresh weekly highs.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

The crypto market displays mixed signals but hints that the bearish trend is not over yet. Adopting a get-in-get-out mentality may be the more favorable approach for investors looking to expose themselves to the market.

Read more

US September NFP Preview: Analyzing gold's reaction to NFP surprises Premium

US September NFP Preview: Analyzing gold's reaction to NFP surprises

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair's reaction to the previous 26 NFP prints.

Read more

Forex MAJORS

Cryptocurrencies

Signatures