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Investors on Thursday gave side eye to Elon Musk’s bid for Twitter Inc., with Tesla Inc. stock falling further and the social-media company’s stock still trading below the offer price, suggesting that markets see risk that the $44 billion deal might not happen.
Tesla shares
TSLA,
fell more than 2% after recouping some of their earlier losses, but were still looking at weekly losses of around 15%. Twitter shares
TWTR,
were down 1.6% at $49.38, nearly 9% below Musk’s $54.20 offer price.
Musk cobbled together funding for the Twitter deal in part by putting up $21 billion in equity commitments.
That would likely result in some part of Musk’s Tesla stake being sold over the next few months, or being held as collateral, which has pressured Tesla shares since Musk’s Twitter proposal was announced April 14. Tesla stock has lost about 13% since that date.
Some analysts also have highlighted worries that Musk, who is also the top executive of privately held SpaceX, might be further distracted by his Twitter bid and eventual leadership. Most, however, have pointed out Musk’s track record of juggling different commitments and delegating effectively as a reason to take that as a secondary concern.
Tesla stock has lost 18% so far this year, and Twitter shares are up 14%. That compares with losses of around 11% for the S&P 500 index
SPX,
in the same period.
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