Investors wiped $ 126 billion (£ 100 billion) off Tesla amid fears that Elon Musk might have to sell shares to the electric car maker to fund his personal contribution to the $ 44 billion Twitter acquisition .
Tesla shares were targeted, although the company did not participate in the offer, but Musk, its CEO and largest shareholder, partially funded the Twitter deal with $ 21 billion of equity and an additional loan of $ 12.5 billion. secured against his stake in Tesla.
Tesla’s 12.2 percent drop on Tuesday was equivalent to a $ 21 billion drop in the value of its stake in Tesla, equal to the cash share it committed to the Twitter deal.
Dan Ives, an analyst at financial firm Wedbush Securities, said concerns about Musk’s upcoming stock sales and the possibility of him being distracted by the Twitter venture weighed on the electric carmaker’s shares. “This [is] “It’s a celebration of the bears’ name,” he said.
Ed Moya, an analyst at the Oanda online trading platform, said: “If Tesla’s share price continues to fall freely, it will jeopardize its funding.
The decline in stocks also occurred against the backdrop of difficult trading in technology stocks. Nasdaq closed at its lowest level since December 2020 on Tuesday as investors worried about slowing global growth and a more aggressive rise in US Federal Reserve interest rates.
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Shares of Twitter also fell on Tuesday, falling 3.9% to $ 49.68, although Musk agreed to buy them on Monday for $ 54.20 per share. The rising spread reflects investors’ concerns that a sharp drop in Tesla’s shares, from which Musk derives most of his $ 239 billion fortune, could make the world’s richest man consider a Twitter deal.
As part of a deal with Tesla, Musk also took out a $ 12.5 billion margin on its shares in Tesla. He had already borrowed about half of his shares in Tesla.
University of Maryland professor David Kirsch, whose research focuses on innovation and entrepreneurship, said investors were beginning to worry about a “cascade of margin claims” on Musk loans.
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