Tesla did not immediately respond to a request for comment. Reuters
Tesla Inc lost $ 126 billion on Tuesday amid investor fears that CEO Elon Musk may have to sell shares to fund his $ 21 billion stake in its $ 44 billion buyout on Twitter Inc. .
Tesla was not involved in the Twitter deal, but its shares were targeted by speculators after Musk refused to reveal publicly where his money for the acquisition came from. Tesla’s 12.2 percent drop on Tuesday was equivalent to a $ 21 billion drop in its stake in Tesla, the same as the $ 21 billion in cash it committed to the Twitter deal.
Wedbush Securities analyst Daniel Ives said worries about upcoming Musk stock sales and the possibility of him being distracted by Twitter weighed on Tesla shares. “This (causes) a bear festival of the name,” he said.
Tesla did not immediately respond to a request for comment.
Of course, the decline in Tesla’s shares came amid a challenge for many technology-related 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.
Shares of Twitter also fell on Tuesday, falling 3.9% to $ 49.68, although Musk agreed to buy it 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.
“If Tesla’s share price continues to fall freely, it will jeopardize its funding,” said OANDA senior market analyst Ed Moya.
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.
(This story was not edited by NDTV staff and is automatically generated by a syndicated channel.)
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