Tesla shares sank 12.2% overnight, wiping $126 billion off the company’s value amid investor concern CEO Elon Musk could sell his shares to finance his purchase. of Twitter for 44,000 million dollars.
The drop in Tesla shares would equate to a $21 billion drop in the value of Musk’s stake in the automaker, the same as the $21 billion in cash he promised to put toward the twitter deal.
OANDA Senior Market Analyst Ed Moya warned: “If Tesla’s share price continues to free fall, that will jeopardize its funding.”
Analysts also said investors are concerned that Musk, who also runs SpaceX, tunneling company The Boring Company and computer-brain interface company Neuralink, will be distracted by the social media company and less interested in manage Tesla.
Edward Jones Senior Equity Analyst Jeff Windau said: “He will spend more time with another company.
“There is a potential limit to the amount of bandwidth you can apply to each of these companies.”
Twitter shares also fall
Shares of Twitter were also down on Tuesday, falling 3.9% to close at $49.68.
Musk agreed to buy the company on Monday for $54.20 a share in cash.
The gap between your offer and TwitterThe actual price of Musk’s shares reflects investor concerns that the decline in Tesla shares, which provide the bulk of Musk’s fortune, could lead him to have second thoughts about buying Twitter.
Amazon founder Jeff Bezos has also asked if Musk’s deal to buy Twitter will give China “a little bit of leverage” over the platformsince Tesla has a large plant in Shanghai.
Freedom of expression concerns
Earlier on Tuesday, Musk responded to concerns that his promise to turn Twitter into a haven for free speech could spark a surge in hate and misinformation that the site has sometimes struggled to deal with in the past.
He tweeted Tuesday night: “The extreme antibody reaction from those who fear free speech says it all.
“By ‘freedom of expression,’ I simply mean what is consistent with the law.
“I am against censorship that goes far beyond the law.
“If people want less freedom of expression, they will ask the government to pass laws to that effect.
“Therefore, going beyond the law is contrary to the will of the people.”
Musk uses his own Twitter account to post about technology and commerce, occasionally answering questions from his 85 million followers.
But he also posted jokes about women’s breasts, compared Canada’s prime minister to Hitler and accused a rescue diver of being a “fart” in the past.
The diver had criticized Musk’s proposal to use a submarine in the rescue of a group of children trapped in a Thai cave. Musk later won a defamation lawsuit brought by the diver, saying he never intended “pedo” to be interpreted as “pedophile.”