Tesla surrendered more than 100 billion dollars (94 billion euros) of its market capitalization on Tuesday. The stock fell more than 12 percent. Investors fear that CEO Elon Musk will sell shares to pay for his takeover of Twitter.
Yesterday, Twitter’s board of directors approved Musk’s acquisition of the company for $44 billion. Musk’s other company, Tesla, lost 12 percent the following day. Although other companies such as Apple also suffered a loss of a few percent, Tesla is a lot more striking. The Tesla CEO himself saw his shares in Tesla drop in value by 42 billion dollars (39.5 billion euros). That’s almost equal to what he’s willing to pay for Twitter.
Stock market observers believe some of the drop reflects investor concerns about the deal. Although Musk is the richest person in the world, much of his wealth is tied up in Tesla stock. Which means he will likely have to sell stock to fund the deal.
Tesla investors may also be concerned about the potential distraction that would come with owning a platform like Twitter. Musk seems to want to have a large influence on the company’s activities, which could lead to time constraints for him. Musk would soon be in charge of Tesla, Twitter and SpaceX. In addition, he also owns two smaller companies, the Boring Company and Neuralink.
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