- On Tuesday, Tesla lost $126 billion in value after its CEO, Elon Musk, struck a deal to buy Twitter.
- Investors fear that Musk will sell some of his Tesla shares to fund his takeover of Twitter.
- Musk’s personal stake in Tesla fell by $40 billion this month.
Tesla stock fell more than 12% on Tuesday, losing about $126 billion in value in the day after Elon Musk, CEO of the electric car maker, Signed deal to buy Twitter for $44 billion.
The market value of the company now $906 billion Down from more than $1 trillion on Monday.
According to multiple media outlets, the pressure on Tesla’s stock largely stems from concerns about how Musk will finance the Twitter acquisition. The billionaire took out a loan of 12.5 billion dollars He secured for his Tesla stock — he owns 17% of EV stock — and borrowed another $13 billion from Wall Street.
Musk agreed to pay the remaining $21 billion, but did not say how he would dig up the money, sparking investor fears that he might sell a large portion of his Tesla stock to cover the cost.
Since then, Musk’s stake in Tesla has plummeted by $40 billion April 4when he initially revealed that he had bought a 9.2% stake in Twitter, Bloomberg mentioned. Since then, Tesla’s stock has fallen several times before Tuesday’s heavy selling, which led to an overall 23% – or $275 billion – drop in the value of the EV maker’s stock this month.
Wedbush analyst David Ives told Bloomberg that concerns that the billionaire might offload some of his shares for the takeover “is causing a bear fest in the name.”
Tesla warned earlier this year that its share price would be affected if Musk sold his shares as collateral. “If Elon Musk is forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to fall,” the company said in its statement. Latest annual deposit.
In November, Musk sold $5 billion of his Tesla stock due to expiring stock options and a $10 billion tax bill he was facing, Insider’s Tim Levine previously reported.
Last week, Tesla reported that 81% increase in revenue year over year for the first quarter. In addition, on April 2, the company announced that it had done so Delivered a record number of cars during the same perioddespite facing supply chain issues.