Shares of Tesla closed down 12.26% to $875.63 apiece Tuesday on the NASDAQ, wiping $125.979 million from market capitalization and losing its status as one of the world’s most valued companies. of 1 billion dollars. Now worth $907.98 billion
This fall occurred after the executive director of the electric car manufacturer, Elon Musk, announced the day before, the closing of an agreement to buy the social network Twitter, for 44,000 million dollars.
The social network also ended the day lower on Wall Street (-3.91%) at 49.68 dollars per share. The downgrade earned it a $1.617 million loss in market capitalization. It is now worth $39.776 million.
Specialists considered that shareholders punished Tesla’s listing on the stock market due to investors’ concern about the possibility that Musk will sell part of his stake in the car manufacturer to pay for the purchase of Twitter.
As disclosed in a statement on Monday, the financing of this acquisition of 44,000 million dollars would come from 13,000 million dollars of stock market debt, as well as a loan for 12,500 million dollars, whose guarantee will be shares of Tesla. In cash it would pay 21,000 million dollars.
“Tesla fell due to certain doubts on the part of the market about the closing of the operation and about the financial and attention capacity of Elon Musk to also take over Twitter, which has reported losses in the last two years,” said Ben Laidler. , global strategist for eToro in a note.
Musk is the richest man in the world with 264,000 million dollars, however, much of his fortune is related to his shareholding in Tesla; as majority shareholder he owns 17% of the station.
According to CNBC, Tesla investors may also be concerned about the potential distractions that could come from owning a platform like Twitter. Musk appears to want to heavily influence the company’s operations, which could lead to a timing crisis for him. Assuming the deal closes, Musk would be in charge of Tesla, Twitter and SpaceX. He also has two smaller companies: Boring Company and Neuralink.
The fall of Tesla and Twitter dragged down the US indices. The technological NASDAQ Composite (-3.95%), the S&P 500 (-2.81%) and the industrial Dow Jones (-2.38%).
The effect of the doubts that have been generated around the acquisition of Twitter also reached dogecoin, the cryptocurrency in which Elon Musk has invested. On Tuesday they fell 8.87% to $0.141 each.
“Given Elon Musk’s public support for dogecoin, it’s no surprise that many believe his intentions for Twitter could be connected. By buying this platform, some believe it will eventually provide a use for Dogecoin and other cryptocurrencies,” Katie Clinebell, an analyst at The Motley Fool, commented in a note.
uncertain prospects
According to Charlie Keough of The Motley Fool, Tesla “plans to increase its deliveries by 50% over several years. And this will be enhanced by the recent opening of its gigafactory in Berlin. The factory will help Tesla expand in Europe and will produce 500,000 vehicles and millions of battery cells each year. If this growth continues, it’s hard to see the stock price declining any time soon.”
Another big boost for Tesla’s growth, the specialist said, is that the robotaxi will be ready by 2024, a vehicle without wheels or pedals.
“However, it should be noted that Musk has missed deadlines on numerous occasions, putting the 2024 target in doubt,” he said.
For the analyst, the main concern is competition. “While Tesla has shown its resilience in recent years, as established manufacturers dive deeper into the electric vehicle space, Volkswagen has advanced in this segment, posing a threat to Tesla’s European sales.”
Tesla released its first-quarter results last week, reporting production of more than 310,048 vehicles, despite supply chain problems. It increased its income by 87% compared to the same period in 2021. (With information from Agencies)