More than US$125bn (£99bn) was wiped off the market value of electric car giant Tesla overnight, over fears boss Elon Musk may have to sell his stake to fund his Twitter takeover .
Tesla shares fell 12.2% on America’s tech-heavy Nasdaq index as investors spooked by speculation that its multibillion-dollar chief executive will sell his shares to pay the cash portion of his mega-deal. $44bn (£35m). .
The Tesla owner has personally pledged to inject $21bn (£17bn) in cash to help fund the deal.
But questions have been raised about how he will raise equity, with much of his fortune tied to assets such as Tesla and space exploration company SpaceX.
There are also fears that the Twitter takeover could see the tech pioneer become distracted and less interested in running Tesla.
Besides SpaceX and Tesla, Mr. Musk also runs tunneling firm The Boring Company and computer-brain interface company Neuralink.
Investors are understandably worried about what Musk is doing and if he can pull it off
Twitter shares were also hit on Tuesday, falling almost 4% to less than $49.68 (£39.19) – around 10% below the offer price of $54.20 (£42.76) an action that was agreed on Monday.
It came amid a broader tech sell-off on Wall Street, with the Nasdaq closing nearly 4% lower.
But market analyst Neil Wilson, at Markets.com, said the drop “underscores that investors are understandably worried about what Musk is doing and whether he can pull it off.”
It is understood that Mr Musk could seek to bring in other investors to help fund the deal rather than risk destabilizing the automaker’s shares, which could also jeopardize the wider Twitter deal.
Mr Musk’s 17% stake in Tesla accounts for the bulk of his massive $270bn (£213bn) personal fortune and also provides the bulk of the funding for the Twitter acquisition.
He has pledged some of his Tesla shares to back a so-called $12.5billion (£9.9billion) margin loan for the deal and a sharp drop in the share’s value could pose problems.
Mr Wilson said there was a lot of uncertainty about how the takeover saga will play out.
“Could he still walk away?” Admittedly, a check for US$21billion (£17billion) is a lot even for him to write,” he said.
“A US$1bn (£789m) severance package might end up feeling less painful.”