Tesla’s Share Slide After Investors Fears On Musk Selling Shares

Tesla lost more than $125 billion in market value on Tuesday after investors raised concerns that Musk might be forced to sell shares to fund his takeover of Twitter.

The company’s shares fell 12.2% from more than $1 trillion to $906 billion, fuelling investor fears that Musk’s Twitter purchase could be bad for Tesla.

According to one analyst, Tesla’s fall in value could pose a problem for a $12.5 billion loan that Musk has secured against his stake in the company.

Under the deal, Musk will provide $21 billion in equity, with the rest of the money raised through loans that use his assets as collateral.

This means, therefore, that if Tesla shares go into a tailspin, a deal structured around the intrinsic value of those shares could burst.

“If Tesla’s share price continues to remain in freefall that will jeopardize his financing,” said Ed Moya, senior market analyst at Oanda.

Elon Musk now runs five companies: Tesla; SpaceX (a company that designs, manufactures and launches advanced rockets and spacecraft); Boring Company; Neuralink; and the newly acquired Twitter.

IT World Canada Staff
IT World Canada Staff
The online resource for Canadian Information Technology professionals.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

ITW in your inbox

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

More Best of The Web