Elon Musk’s surprising decision to revive his offer for Twitter Inc. this week sparked a rally in the social-media company’s shares. For Tesla Inc.’s stock, however, it is an ominous sign. The electric-vehicle maker’s shares have struggled through the billionaire’s highly public pursuit of Twitter, his subsequent efforts to wriggle out of the deal and the related lawsuit that brought it all to a head.
Alternatives to share sales include another round of private funding and Musk pledging his Tesla stake for a loan. But liquidating some stock will likely be part of the plan, said Jim Osman, founder of special situations research firm The Edge Consulting Group. “The quickest option to execute among the above is to sell Tesla shares,” he said. “I think it will be a mix of all the above three, but with more than 50% of the remaining $7 billion to come through selling of Tesla shares.”