Tesla stock was down more than 9% in the afternoon as the tech-heavy Nasdaq Composite slipped about 2.5%. Other mega-cap tech stocks like Apple, Amazon, Google and Facebook parent Meta were also down between 2% and 4%.
The declines come just a day after Twitter’s board approved Musk’s $44 billion acquisition of the company, showing some of the fall off 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. The deal also includes $21 billion in equity.
Despite being the world’s richest person, much of Musk’s wealth is tied up in Tesla stock, meaning he would likely have to borrow against his holdings to fund the deal.
Telsa investors also may be concerned about the possible distractions that could come from owning a platform like Twitter. Musk has appeared to want to heavily influence the company’s operations, which could lead to a time crunch for him. Assuming the deal closes, Musk would be 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 year-earlier period 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,” CFO Zach Kirkhorn said on the company’s earnings call.