• Tesla moved higher Monday after Elon Musk signaled he could walk away from his Twitter bid.

• Musk cited a lack of clarity over spam accounts on the social media platform.

• Shares of the EV maker have sagged since Musk launched his Twitter bid in mid-April.

Tesla shares edged higher Monday after chief executive Elon Musk signaled he could walk away from his bid to acquire Twitter.

Shares of the electric car giant gained as much as 3% in mid-morning trading, after lawyers for Musk accused Twitter of breaching "its obligations under the merger agreement."

The latest spat between Musk and Twitter comes as Wall Street grows doubtful that a deal will come to fruition. Wedbush's' Dan Ives said on Twitter that the latest developments reinforce his thoughts on the deal over the last month, and that Musk could potentially opt to walk away for a roughly $1 billion breakup fee.

"Our view; Musk looking to walk away from deal," Ives wrote on Twitter. He added that Twitter has thus far remained reluctant to accept that outcome and has signaled that it will sue Musk to keep him at the table. Shareholders filed a class action lawsuit against Musk on May 27  over the chaos of the Twitter bid, which they argue amounts to manipulation of the stock price and a violation of California corporate law.

Tesla investors have watched the Musk-Twitter saga nervously, and the potential acquisition represents "major overhang on Tesla," according to Ives. The stock is down about 25% since Musk announced his bid on April 14.

Musk and Twitter have quarreled for weeks over fake accounts on the social media platform. Musk first raised his concerns in May, saying that Twitter misconstrued the percentage of spam accounts that make up active users. Musk's lawyers say he is entitled to clarity on the issue as Twitter's prospective owner, and accused Twitter of trying to "obfuscate and confuse the issue."