Elon Musk’s eccentric antics have delivered a huge blow to Tesla’s market cap. According to Reuters, the electric vehicle (EV) maker lost $126 billion in value yesterday due to investor concerns that Musk may liquify his company shares to fund the $21 billion equity contribution to his $44 billion Twitter acquisition.
Musk didn’t disclose the source of capital with which he bought Twitter. This prompted speculations that he might have sold Tesla shares to buy the social media platform.
The 12.2% drop in Tesla’s shares amounted to a $21 billion drop in the value of Musk’s stake in the company. This amount happens to be the same as $21 billion in cash which he committed to acquire Twitter.
It bears mentioning, however, that Tesla’s share decline has coincided with a drop in numerous other technology-related stocks. The report adds that the investors’ worries about sluggish global growth have resulted in a Nasdaq closure at the lowest level since December 2020.
Twitter’s shares also plunged on Tuesday, falling 3.9% to close at $49.68 despite Musk buying them for $54.20 per share in cash. Experts reckon that the massive decline in Tesla’s shares — which is Musk’s primary source of fortune — may cause him to rethink his Twitter acquisition.
They also believe that, although Tesla is enjoying amazing sales and soaring demand for its EVs in multiple car markets, the recent slump in its market value could be detrimental for the company and the investors.