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Tesla Loses $ 126 Billion Amid Funding Concerns Musk Twitter Deals -By ASC

Tesla did not immediately respond to a request for comment. Reuters

Tesla Inc. lost $ 126 billion on Tuesday amid investor concerns that Chief Executive Elon Musk may have to sell shares to fund his $ 21 billion equity contribution to Twitter Inc.’s $ 44 billion purchase.

Tesla was not involved in the Twitter deal, yet its shares have been targeted by speculators after Musk refused to disclose publicly where his cash for the acquisition came from. The 12.2% drop in Tesla shares on Tuesday coincided with a $ 21 billion drop in the value of its Tesl holdings, similar to the $ 21 billion cash he committed to the Twitter deal.

Wedbush Securities analyst Daniel Ives said that concerns about Musk’s upcoming stock sale and the possibility that he became distracted by Twitter affected Tesla shares. “This (this) caused a bear festival in that name,” he said.

Tesla did not immediately respond to a request for comment.

To be sure, the fall in Tesla shares comes with a challenging backdrop for many technology -related stocks. The Nasdaq closed at its lowest level since December 2020 on Tuesday, as investors worried about slower global growth and a more aggressive rate hike from the US Federal Reserve.

Twitter shares also declined on Tuesday, falling 3.9% to close at $ 49.68 even as Musk agreed to buy it on Monday for $ 54.20 a share in cash. The widening spread reflects investor concerns that a sharp decline in shares of Tesla, for which Musk earned most of his $ 239 billion fortune, could cause the world’s richest people to think twice about the Twitter deal.

“If Tesla’s share price continues to remain in a free fall that will affect its financing,” said OANDA senior market analyst Ed Moya.

As part of the Tesla deal, Musk also issued a $ 12.5 billion margin loan tied to its Tesla shares. He has borrowed about half of his Tesl shares.

University of Maryland professor David Kirsch, whose research focuses on innovation and entrepreneurship, said investors are beginning to worry about the “margin call cascade” on Musk loans.

(This story has not been edited by AGRASMARTCITY staff and is automatically generated from a syndicated feed.)


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