May 23, 2022

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Tesla stock drops more than 9% after Musk's Twitter deal

Tesla stock drops more than 9% after Musk’s Twitter deal

A Tesla store is seen in Shanghai, China, February 1, 2022.

Costphoto | Future Publishing | Getty Images

Tesla The stock is down more than 9% in the morning due to heavy technology The Nasdaq Composite Index is down 2.2%.. Other huge technology stocks such as appleAnd AmazonAnd The Google And dead It also decreased by 2-4%.

The coupon comes only a day after the Twitter board Musk approved $44 billion The takeover of the company, showing some decline in the stock may be a reflection of investors’ concerns about the deal. Musk has $25.5 billion in fully committed debt, including $12.5 billion in loans for his Tesla share. It also offers a commitment of approximately $21 billion.

Despite being the world’s richest person, much of Musk’s wealth is tied up in Tesla stocks, meaning he will likely have to borrow against his holdings to fund the deal.

Investors may also be concerned about deviations from Twitter. It seems that Musk wants to seriously affect the company’s operations, which could lead to a time crunch among all of his companies. Assuming the deal closes and Musk takes over, that would leave him in charge Teslaand Twitter and SpaceX. He also owns two smaller projects, The Boring Company and Neuralink.

Tesla said in its Q1 2022 earnings report on April 20 that while auto revenue rose 87% from the same period last year to $16.86 billion, the company lost about a month of “construction volume” in Shanghai due to the Covid shutdown.

“Production is resuming at limited levels, and we are working to get back to full production as quickly as possible,” Kirkorn said on the company’s earnings call.

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