Elon Musk’s move to Twitter is bad news for Tesla. Photo by AFP
Parts of Tesla, the maker of Elon Musk’s electric vehicle, crashed Tuesday for the first time in months. erasing the $ 100 billion value market in one stroke.
Tesla shares hit the brink of $ 1,000 on Monday ($ 998), dropping to as low as $ 876 on Tuesday, when the tycoon closed a $ 44 billion purchase of Twitter. This Wednesday, the paper bounced, but it reached US $ 900, 10% still down on Monday.
So is the company leave the club of companies worth a trillion dollars which he re -included last week, when he announced better -than -expected results.
What happened? The answer it is in the decisions of its founder and not in any announcement by Tesla itself. Tesla hasn’t stopped losing value since its CEO announced his intention to store more and more power on Twitter.
Twitter logo in company offices purchased by Elon Musk. Photo by AFP
As Tesla’s stock has risen along with Elon Musk and his rising popularity in recent years, lost nearly a quarter of their value since its CEO’s courtship was revealed on Twitter earlier this month.
Since Musk’s minority stake in Twitter has been announced, the dollar value of his stake in Tesla reduced by more than he offered to pay for the social media company.
The dollar value of Musk’s 17% stake in Tesla has shrunk by approximately $ 42 billion.
Investors believe Musk may need to sell part of his stake in the company in order to buy Twitter, and you are likely to be distracted by your daily routine while doing so.
His stake in Tesla is worth more than $ 150 billion, a large portion of which makes Musk the richest man in the world, but he used approximately $ 60 billion of his Tesla stock as collateral for loans.
CHICAGO, ILLINOIS APRIL 25: Elon Musk’s tweets are displayed on a computer April 25, 2022 in Chicago, Illinois. It was announced today that Twitter has received a $ 44 billion bid from Musk to acquire the company. (Photo Illustration by Scott Olson/Getty Images) == FOR NEWSPAPERS, INTERNET, TELCOS, AND TELEVISION ONLY ==
In his $ 44 billion bid for Twitter, Musk promised to contribute $ 21 billion in cashbut so far it has not been indicated where the money will come from.
The stock sell-off on Tuesday was fueled by speculation that Musk may have to sell or borrow against more Tesla stock to finance its acquisition of Twitter.
Technology analyst Daniel Ives of Wedbush Securities said the Twitter saga “put a black cloud on Tesla stock in the short term.”
“As we said before, the transaction on Twitter was never ideal for Tesla investorsbecause actions now will succeed the burden of getting TwitterIves said in a note to clients, according to Bloomberg.
Although Musk has other ways to find money, buy Twitter it will take you time and attention, and that could cost Tesla.
Given how outspoken he has been on the subject, that’s believable Musk is likely to play an active role in the company when it is private, that will take the time and effort of the electric carmaker.
In addition to Tesla, Musk is also the CEO of space exploration company SpaceX and the underground transportation company. The Boring Company.
“Tesla shareholders can’t be as happy as Musk needs to be turn more attention to win the (electric vehicle) race, “said Edward Moya, senior market analyst at currency firm Oanda.
However, at least one analyst believes it can work.
“Elon Musk is an amazing CEO and an amazing manager and one of the key components of investing in stocks … is that it? you have to buy from the managerPhilip Palumbo, chief investment officer at Palumbo Wealth Management, said Monday, according to Bloomberg.
“From my perspective, there is nothing better than Elon Musk, and that has always been the case, (but) the question is: So can you really juggle the three businesses?“.
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Source: Clarin
