Tesla shares (NASDAQ: TSLA) were down over 10 percent by noon on Tuesday following Elon Musk’s acquisition of Twitter, which was announced yesterday.
Other tech stocks, like Apple, Amazon, and Google, were also hit between 2 and 4.5 percent at just after 1:30 PM on the East Coast.
Tesla lost over $100 billion in market cap due to the slide. Down over $100 per share in midday trading, the automaker’s performance is not the reason for the slide. It is more likely due to CEO Elon Musk’s leverage against his shares, which he needed to borrow against his Tesla shares to come up with his portion of funding for the deal.
At the time of publish, TSLA shares traded at $888.92.
However, investors could be worried about Musk’s ability to balance Tesla with another venture that requires so much maintenance and attention, and Twitter is certainly something that fits this description. Musk has no intentions of just owning Twitter to be CEO. He has discussed his plans to essentially overhaul the platform with verification processes and less censorship, as he has been vocal regarding his distaste for the platform’s non-adherence to free speech.
However, Musk has balanced his time between several companies for many years. He has regularly attended meetings for both Tesla and SpaceX on a weekly basis, running both companies while also balancing other projects, like his smaller ventures of Neuralink and the Boring Company.
Tesla has had no substantially negative news that would incite investors to perform a large sell-off, either. The company reported one of its strongest quarters in company history last week during its Q1 Earnings Call, beating consensus estimates for its financial statistics across the board. It also opened two new production facilities in Q1: one in Germany and another in Texas.
Tesla did suffer some short-term closures at its factory in Shanghai, which lasted about three weeks. The factory was operational before the call took place last Wednesday, with Zach Kirkhorn, Tesla’s CFO, stating that production is resuming at limited levels.
Disclosure: Joey Klender is a TSLA Shareholder.
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