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Tesla stock was down more than 9% in the morning as the tech-heavy Nasdaq Composite slipped about 2.2%. Other mega-cap tech stocks like Apple, Amazon, Google and Meta were also down between 2-4%.
The slip comes just a day after Twitter’s board approved Musk’s $44 billion acquisition of the company, showing some of the stock’s decline may be a reflection of investor concerns with the deal. Musk has secured $25.5 billion of fully committed debt, including $12.5 billion in loans against his Tesla stock. He’s also providing an approximately $21 billion equity commitment.
Despite being the world’s richest person, much of Musk’s wealth is tied up in Tesla stock, however, meaning he would likely have to borrow against his holdings to fund the deal.
Investors may also be concerned about distractions from Twitter. Musk has appeared to want to heavily influence the company’s operations, which could lead to a time crunch between all of his companies. Assuming the deal closes and Musk takes over, that would leave him in charge of Tesla, Twitter and SpaceX. He also owns two smaller ventures, the Boring Company and Neuralink.
And Tesla said in its first-quarter 2022 earnings report on April 20 that, while automotive revenue was up 87% from the same period last year to $16.86 billion, the company lost about a month of “build volume” in Shanghai because of Covid shutdowns.
“Production is resuming at limited levels, and we’re working to get back to full production as quickly as possible,” Kirkhorn said on the company’s earnings call.