. Tesla investors and analysts are afraid that Elon Musk’s offer to buy Twitter would detract from the electric automaker’s performance, as the CEO is preoccupied with his takeover bid and expected stock sales to pay it.
On Thursday, the billionaire entrepreneur, who also runs rocket business SpaceX, made a $43 billion acquisition offer to Twitter Inc (TWTR.N).
Tesla observers are worried that Musk will work to complete the acquisition, maybe by selling more Tesla stock and then overseeing yet another firm.
“Elon is preoccupied. He’s got a lot on his plate right now. He’s participating in a variety of activities “said Gene Munster, managing partner of Loup Ventures, a venture capital firm that holds Tesla stock.
Tesla, the world’s most valuable manufacturer, has lost more than 9% of its value since he revealed his more than 9% holding on Twitter last Monday.
While Musk has spoken about possible enhancements to Twitter that he would want to see, analysts say Tesla is facing its own issues, including the need to ramp up production at new assembly factories in Berlin and Texas. Meanwhile, the COVID-19 crackdown in China has shut down Tesla’s Shanghai facility, which is the company’s largest.
“Musk is Tesla,” said Craig Irwin of Roth Capital Partners. “Investors don’t want Tesla to lose its market-leading position.”
Prior to this excursion, investors had Musk’s own comments on which to base their suspicions. He said last year that he worked seven days a week, “crazy hours,” dividing his time between Tesla and SpaceX. He’s also the CEO of Neuralink, a brain-chip firm, and the Boring Company, a tunneling company.
Another concern, according to analysts, is how Musk will fund a prospective acquisition of Twitter, which would require stock sales and large loans.
According to Wells Fargo analyst Colin Langan, Musk, who owns over 9% of Twitter, would need $39 billion to complete the deal, and the selling of more Tesla shares might put even more pressure on the price.