Tesla shares slid more than 9 per cent on Tuesday, wiping about $97bn off the electric automaker’s valuation, a day after the company’s chief executive and largest shareholder Elon Musk clinched a deal to buy Twitter.
Musk is funding the $44bn takeover with $13bn of debt from Wall Street’s largest lenders, as well as a $12.5bn loan secured against his Tesla stake. The billionaire has not yet said how he will finance the remaining $21bn of cash that he has promised, raising the possibility that he will need to sell billions of dollars’ worth of Tesla shares.
That prospect has heaped pressure on the electric vehicle group’s stock. Tesla is among the most valuable publicly traded companies in the world, worth $942bn on Tuesday, and its shares trade with a speed that is almost unparalleled in US markets.
In morning trading on Tuesday, more than 18mn Tesla shares changed hands, worth more than $16bn. That was more than four times the level of the next highest traded stock by value: iPhone-maker Apple.
Musk and his bankers at Morgan Stanley have been sounding out other investors who may want to invest in a privately held Twitter alongside him, which would reduce the size of the cheque he ultimately has to write himself, according to people briefed on the matter.
This is a developing story.