Elon Musk is everywhere.
Since the beginning of April, the billionaire has almost stolen the bill from the rest of the business world.
We started talking about him and his offer, the social network Twitter (TWTR) – Get the report from Twitter, Inc. on April 4th after it announced a significant share. What followed was a fast-paced saga with plenty of twists and turns. Finally, on April 14, Musk made an offer to buy the entire company at $54.20 per Twitter share. The transaction is valued at US$44 billion. After hesitation, the board of directors finally agreed on April 25 to accept the billionaire’s proposal.
Despite this agreement in principle, Musk has not stopped trolling Twitter with posts on the platform, where he is one of the largest influencers with more than 86.6 million followers.
Not a day goes by that Musk doesn’t communicate via Twitter. If it’s not about bemoaning the social network’s supposed lack of freedom of expression, it’s to provoke the changes it foresees. Twitter now takes up most of the serial entrepreneur’s public communications, crowding out Tesla (TSLA) – Tesla Inc Report clearly recede into the background.
Britta Pedersen-Pool/Getty Images/TS
Losing $100 billion in 2 weeks
One wonders if Tesla is still his priority at the heart of his master plan to save the planet. The vehicle maker delivered a strong performance in the first quarter despite its challenges, giving Musk a great opportunity to extend Tesla’s advantage over legacy automakers looking to steal his throne.
In a sign that Tesla fans and investors aren’t appreciating this potential Twitter distraction, the automaker’s stock has suffered badly in recent days. On April 13, the day before Musk announced Twitter’s takeover bid, Tesla stock closed the session at $1,022.37, a market cap of more than $1.05 trillion.
Scroll to Next
On April 14, the day the offer was announced, Tesla stock closed at $985, down almost 4%. The decline in shares continued and even accelerated when Musk announced the structuring of funding for the operation. Tesla shares closed at $881.51 on April 27 for a market value of $911 billion. Basically, the electric vehicle maker lost $100 billion in value in two weeks.
“Tesla shareholders express concern about Elon [Musk] He’s doing too many things at once,” said Scott Sheridan, market expert and CEO of niche investment brokerage firm Tastyworks. “Also, shareholders may be concerned that he might scare off potential car buyers, depending on what he does with Twitter.”
Musk has interests in several companies that rely on him to establish themselves in their respective industries. Alongside Tesla, he is CEO of SpaceX, at the helm of Neuralink and The Boring Company.
Will Musk Sell Tesla Stock?
But Tesla is Musk’s darling. The tech tycoon is the architect of the success of the group, which was still on the brink of bankruptcy in 2019 when it was struggling to ensure the production ramp-up of the Model 3 entry-level vehicle.
The automaker, like the entire automotive industry, is currently confronted with a cocktail of negative factors: supply chains are being disrupted by the pandemic, the shortage of chips is continuing, and the sharply rising prices for commodities such as nickel – important for batteries – are going nowhere. China, for example, has been imposing a lockdown on Shanghai since the end of March. Tesla’s Shanghai factory serves the local market, as well as Asia and Europe.
In addition, Tesla has also promised that its vehicles will be able to drive themselves by the end of the year. Production of the highly anticipated Cybertruck is scheduled for 2023. As you can see, the automaker has a lot under its belt and therefore doesn’t need any distractions.
Tesla investors and fans are also keeping an eye on how Musk plans to fund the Twitter-leveraged buyout deal. Musk has managed to secure $25.5 billion in debt and margin loans and provides a $21 billion equity commitment. This latest part of the deal, which he personally guaranteed, suggests he could sell Tesla stock, which makes up a large chunk of his vast fortune, valued at $253 billion, according to the Bloomberg Billionaires Index as of April 27 .