Elon Musk’s Twitter Takeover Sends Tesla’s Stock on a Wild Ride
On Tuesday, the world’s richest millennial mogul watched his prized Tesla shares tumble 12.2 %—a drop that wiped $21 billion from his holdings. The tumble matches the hot cash Musk slammed on the table for the Twitter buyout, sparking a frenzy of worry among investors.
Why the Shock?
- Cash Crunch – Musk’s $21 billion stake in Twitter is tied to a bank‑secured, $12.5 billion margin loan that wobbles as Tesla’s price stalls.
- Dual Hands – Though Tesla isn’t legally part of the Twitter deal, speculators are betting on Musk selling his own shares to keep the acquisition afloat.
- Fed Frenzy – The Nasdaq dipped to its lowest since December 2020, and investors fretted over a property‑shaking rate hike strategy from the U.S. Federal Reserve.
Industry Rundown
While Tesla took the headlines, Twitter slipped 3.9 % to $49.68 per share after Musk struck a $54.20‑cash price on Monday. The spread widened because everyone’s keeping an eye on whether Musk will still have the capital to back his 44‑billion‑dollar dream.
Market Whisperings
Daniel Ives (Wedbush Securities) summed up the mood: “It’s like a bear festival on the name.” His sentiment tells investors that any further dip could trigger a rapid cascade of margin calls for Musk, potentially destabilizing the whole deal.
Ed Moya (OANDA) added a cautionary note: “If Tesla’s share price continues freefalling, it could jeopardize his financing.”
What Lies Ahead?
- Experimental margin loan structure may ignite a chain reaction of “borrow‑back” demands.
- Tech stocks, already feeling the ache of slowing global growth, face additional headwinds.
- Musk’s ability to juggle multiple megabucks ventures remains under intensive scrutiny.
Ironically, the company Tesla is championing electrification and sustainability is now wrestling with stock‑price volatility that might force one of its biggest shareholders out of the marketplace—at least until the Twitter saga—and all this while the world’s richest person is navigating the maze of corporate finance.
