Tesla shares tumble on Musk's Twitter bid

Tesla’s share price fell sharply following Elon Musk’s $44bn bid for Twitter, wiping more than $125bn off the carmaker’s valuation.

Twitter accepted a takeover bid from Tesla boss Musk on Tuesday, who is partly financing the deal with a $12.5bn loan secured against his stake in Tesla and another $13bn borrowed from Wall Street banks.

Questions remain about how he will finance the rest of the deal, however, raising concerns that he might sell down his stake in the electric car manufacturer.

The concerns weighed heavily on the stock, and sent shares in the company 12% lower to close on Tuesday at $876.

Neil Wilson, chief market analyst at Markets.com, said: “Clearly Tesla shareholders are a little peeved. Even with a cult stock, acolytes can get annoyed at stuff their dear leader might do, like say the co-owner of the business mortgaging a chunk of his holding to buy a business that has nothing to do with making and selling cars or space rockets.

“Tesla shareholders get nothing from this except a chief executive with yet another distraction. Margin call price is at $571, at which point all manner of bad things will be happening. We are a long way from that level, but Tuesday’s steep decline highlights the extreme leverage and therefore risk involved in this transaction.”