Mayday! Mayday! Mayday ! Teslas stock are going down as investors worry about Elon Musk’s proposed takeover of Twitter
Elon Musk’s plan to buy Twitter has yet to be accepted by Twitter’s shareholders, but Tesla investors are already apprehensive.
Tesla shares fell 12.2% overnight, wiping $126 billion off the company’s value, as investors worried that CEO Elon Musk would sell his shares to raise cash for his $44 billion takeover of Twitter.
The reduction in Tesla shares would equal a $21 billion drop in the value of Mr Musk’s stake in the company, which is the same amount of money he has promised to invest into the Twitter acquisition.
“If Tesla’s share price continues to decrease, his finance will be jeopardised,” said OANDA senior market analyst Ed Moya.
Investors are also concerned that Mr Musk, who also runs SpaceX, The Boring Startup, and Neuralink, a computer-brain interface company, may be distracted by the social network company and less engaged in operating Tesla, according to analysts.
“He’ll be spending more time with another venture,” said Edward Jones senior equities analyst Jeff Windau.
“You may be limited in the amount of bandwidth you may apply to each of these businesses.”
Twitter’s stock is also down.
Twitter’s stock was also down on Tuesday, closing at $49.68, down 3.9 percent.
On Monday, Mr Musk agreed to purchase the company for $54.20 per share in cash.
The disparity between his bid and Twitter’s actual share price reflects investor concerns that a drop in Tesla shares, which account for the majority of Mr Musk’s fortune, might cause him to reconsider buying Twitter.
Because Tesla has a large plant in Shanghai, Amazon founder Jeff Bezos has queried whether Mr Musk’s deal to buy Twitter will give China “a bit of leverage” over the platform.
Concerns about free speech
Mr Musk responded earlier on Tuesday to fears that his pledge to make Twitter into a refuge for free speech could lead to a rise in the hate and misinformation that the platform has hitherto struggled to deal with.
On Tuesday night, he tweeted: “Those who are afraid of free speech have a strong anti-free speech reaction, which tells it all.
“By ‘free speech,’ I simply mean speech that complies with the law.
“I oppose censorship that goes above and beyond the law.
“People who want less freedom of speech will petition the government to pass legislation to that end.
“As a result, going outside the law is against the people’s desire.”
Mr Musk posts about technology and commerce on his own Twitter account, and he periodically answers questions from his 85 million followers.
However, he has previously made comments about women’s breasts, compared Canada’s prime minister to Adolf Hitler, and accused a rescue diver of being a “pedo.”
Mr Musk’s idea to employ a submarine to rescue a group of lads trapped in a Thai cave has been criticised by the diver. Mr Musk eventually won a defamation suit launched by the diver, claiming that “pedo” was never meant to mean “paedophile.”