Tesla shares fell more than 9 percent on Tuesday, wiping the electric car maker’s valuation of about $97 billion, a day after CEO and largest shareholder Elon Musk reached a deal to buy Twitter ‘s transaction.
Musk funded the $44 billion acquisition with $13 billion in debt from Wall Street’s biggest bank and a $12.5 billion loan secured by his Tesla shares. The billionaire has yet to say how he will finance the remaining $21 billion in cash he pledged, raising the possibility that he will need to sell billions of dollars worth of Tesla stock.
That prospect has weighed on the electric car group’s stock. Tesla, one of the world’s most valuable publicly traded companies with a market value of $942 billion on Tuesday, is trading at a speed almost unmatched in the U.S. market.
More than 18 million Tesla shares, worth more than $16 billion, changed hands in early trading Tuesday. That’s more than four times the level of the second-highest traded stock by value: iPhone maker Apple Inc.
Musk and his bankers at Morgan Stanley have been scouting for other investors who might want to join him in investing in private Twitter, according to people familiar with the matter, which would reduce the size of the checks he will eventually have to write himself.
This is a developing story.