Elon Musk selling Tesla stocks to fund his Twitter takeover is like giving away caviar to buy $2 pizza, Wedbush’s Dan Ives says
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Elon Musk’s revived Twitter deal will be disastrous for Tesla, Wedbush Securities analyst Dan Ives has warned.
A significant chunk of Musk’s $250 billion fortune is tied up in Tesla shares and his stake in SpaceX. Ives said that Musk will have to offload more Tesla shares to fund his takeover attempt – which could lead to the electric vehicle maker’s stock falling further.
“That’s like me giving away caviar to buy a $2 slice of pizza,” Ives told BBC’s ” Today” show Wednesday.
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On Monday, Musk proposed restarting talks to buy Twitter at the originally-agreed price of $54.20 a share in a letter addressed to the social media giant’s lawyers, according to a Securities and Exchange Commission filing.
Twitter sued Musk in July after he said he was terminating his deal to purchase the company. His backtracking means he could avoid a costly courtroom battle.
Musk, who is both Tesla’s largest shareholder and the world’s richest person, has trimmed down his stake in the electric maker this year in a bid to raise cash to fund his Twitter takeover attempt.
He offloaded $6.9 billion in Tesla shares in August, meaning he has cut down his stake by around $32 billion over the last 12 months.
Ives said at the time that Musk’s Tesla stock sale was “writing on the wall that a deal could be on the cards” — and upgraded his Twitter price target from $30 to $50 a share.
Tesla fell 1.26% to trade at $246.29 in Wednesday’s premarket, while Twitter slipped 0.48% to $51.75.
Read more: Read Elon Musk’s letter to Twitter saying he’ll honor the original $44 billion deal if there’s an ‘immediate’ end to their court battle