Tesla lost more than $125 billion in market value on Tuesday after investors raised concerns that Musk might be forced to sell shares to fund his takeover of Twitter.<\/p>\n
The company’s shares fell 12.2% from more than $1 trillion to $906 billion, fuelling investor fears that Musk’s Twitter purchase could be bad for Tesla.<\/p>\n
According to one analyst, Tesla’s fall in value could pose a problem for a $12.5 billion loan that Musk has secured against his stake in the company.<\/p>\n
Under the deal, Musk will provide $21 billion in equity, with the rest of the money raised through loans that use his assets as collateral.<\/p>\n
This means, therefore, that if Tesla shares go into a tailspin, a deal structured around the intrinsic value of those shares could burst.<\/p>\n
“If Tesla’s share price continues to remain in freefall that will jeopardize his financing,” said Ed Moya, senior market analyst at Oanda.<\/p>\n
Elon Musk now runs five companies: Tesla; Space X (a company that designs, manufactures and launches advanced rockets and spacecraft); Boring Company; Neuralink; and the newly acquired Twitter.<\/p>\n