Taking over Twitter may be good for Elon Musk, but it hasn’t been good for Tesla’s shares.
One day after Twitter announced it had accepted Musk’s $44 billion takeover bid, Tesla shares sank 12.2%, wiping out more than $125 billion off the electric vehicle maker’s market value.
The falls come as Wall Street fretted about how the deal could impact the electric vehicle maker and its stock price.
When Musk announced he had secured the money to finance the transaction, he said he would cover $21 billion himself, with banks helping finance the other half.
What remains unclear is how he will come up with that money — whether he will sell some of the Tesla shares he owns, borrow against them, bring in additional investors, or all three.
There is also growing concern about whether owning Twitter would bring him into conflict over free speech with the government in China, a key market for Tesla where the auto maker also has significant production.
On top of that, there is the risk Musk could become distracted by his latest acquisition.