Tesla shares sank 12.2 percent overnight, wiping $ 126 billion from the company’s value amid investor fears that CEO Elon Musk could sell his shares to fund equity to buy it out on Twitter for $ 44 billion.
The decline in Tesla’s shares will be equivalent to a $ 21 billion drop in the value of Mr Musk’s stake in the carmaker – the same as the $ 21 billion in cash he promised to invest in the Twitter deal.
OANDA Senior Market Analyst Ed Moya warned: “If Tesla’s share price continues to fall freely, it will jeopardize its financing.”
Analysts also said investors are worried that Mr. Musk, who also runs SpaceX, the tunneling company The Boring Company and the computer-based interface company Neuralink, will be distracted by social media company and less interested. from the management of Tesla.
Jeff Windau, a senior stock analyst at Edward Jones, said: “He will spend more time with another venture.
“There is a potential limit on the amount of bandwidth you can apply to each of these companies.”
Twitter shares are also falling
Shares of Twitter also fell on Tuesday – down 3.9% to $ 49.68.
Mr Musk agreed to buy the company on Monday for $ 54.20 per share.
The difference between his offer and the actual price of Twitter shares reflects investors’ fears that the decline in Tesla shares – which provide much of Mr Musk’s wealth – could make him consider buying Twitter. .
Amazon founder Jeff Bezos also asked if Mr. Musk’s deal to buy Twitter would give China “little influence” on the platform, as Tesla has a large plant in Shanghai.
Concern for freedom of speech
Earlier on Tuesday, Mr Musk responded to fears that his vow to turn Twitter into a haven for free speech could increase the hatred and misinformation the site has sometimes struggled with in the past.
He tweeted on Tuesday night: “The extreme reaction of antibodies from those who fear freedom of speech says it all.
“By ‘freedom of speech’ I mean what is in accordance with the law.
“I am against censorship that goes far beyond the law.
“If people want less freedom of speech, they will ask the government to pass laws to that effect.
“Therefore, going beyond the law is against the will of the people.”
Mr Musk used his own Twitter account to post about technology and commerce, occasionally answering questions from his 85 million followers.
But he also published jokes about women’s breasts, compared the Canadian prime minister to Hitler, and accused a rescue diver of being a “pedo” in the past.
The diver criticized Musk’s proposal to use a submarine to rescue a group of boys trapped in a Thai cave. Musk later won a defamation lawsuit filed by the diver, saying he never intended to interpret “pedo” as “pedophile.”
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