Tesla stock has dropped following investor concerns that CEO Elon Musk may have to sell shares in the electric carmaker to help pay for Twitter's acquisition.
On Tuesday, Tesla's market worth was reduced by $125 billion (£99.3 billion).
According to one analyst, the drop in Tesla's value could jeopardize a $12.5 billion loan backed by Mr Musk's share in the company.The problems reflect the difficulties he encounters as he tries to manage five businesses.
Tesla's stock has taken a beating, with some investors questioning whether Mr Musk's purchase of Twitter is harmful for the company.
Shares fell 12.2 percent, from just over $1 trillion to $906 billion.
Some speculate that by attempting to purchase Twitter, Elon Musk may have taken on more than he can handle.
Elon Musk might revolutionize Twitter in four ways.
Elon Musk has cautioned that he must safeguard Twitter users.
Tesla's profits are increasing as customers pay more.
Mr. Musk is well-known for being a workaholic. On Twitter in 2019, he was questioned if it was true that he worked 90-hour weeks.
"Hours have been substantially higher in recent years," he remarked. "However, I don't advocate it because it's detrimental for your health and happiness."
Mr Musk is the CEO of Tesla, the world's most valuable car manufacturer. He is also the CEO of Space X, a firm that designs, builds, and launches sophisticated rockets and spacecraft.
He also established the Boring Company, which aims to revolutionize transportation through tunneling, as well as Neuralink, which aims to connect people's brains to computers.
That's already a lot to consider.Mr. Musk is now considering becoming the new owner of Twitter, one of Silicon Valley's most difficult positions.
Twitter isn't like any other tech firm. It's a global news machine.
TikTok is for celebrities, and Twitter is for world leaders. And don't believe Twitter's influence is limited to the West.
Narendra Modi, the Prime Minister of India, is by far the most followed worldwide leader on Twitter.
However, Twitter's enormous clout comes at a cost. Twitter must decide how to moderate the platform as the worldwide "town square" for debate.
Musk refers to himself as a "free speech absolutist." However, make no mistake: the platform will require moderation.
He explained his meaning on Tuesday, saying, "By 'free speech,' I simply mean that which is legal."That definition, however, has significant flaws. For starters, each country's legal system is unique.
In addition, determining whether a tweet violates the law in real time is frequently challenging.
Is it possible that tweets advocating the storming of Capitol Hill in Washington, D.C., have crossed the line into insurgency? What is the line between criticism and libel? When does anti-Semitic slurs constitute harassment or abuse?
Jason Miller, Gab's CEO, was interviewed in February. He used to be Donald Trump's press secretary and now runs a "free speech" Twitter alternative.
Gab, on the other hand, has a long list of restrictions on what you may and cannot say.
"I spend a lot of time thinking about moderation policy; it's certainly the most common question I get," he remarked.
So, whatever happens, Mr. Musk will have to devote a significant amount of time and resources to Twitter monitoring.
Other structural issues with Twitter are also present. Twitter, unlike its Silicon Valley contemporaries like Facebook and YouTube, has never been very successful at monetizing its platform.
Mr. Musk is confident that he can change this. However, it will require time and work to accomplish this.
He is the owner of several firms.
"Unless Elon Musk discovers a method to add hours to the day, he can only dedicate so much time to everything." "Power Play: Tesla, Elon Musk, and the Century Bet," says Tim Higgins, author of the book.
"I'm guessing he'll be deep in the weeds of Twitter in the coming months or years. And if you're a Tesla shareholder, you're undoubtedly worried "According to Mr. Higgins.
Tesla stockholders are also afraid that the acquisition may result in him selling a portion of his company.
He must contribute $21 billion in equity as part of the arrangement. It's unclear where this money is coming from at the moment.
The remaining funds come from loans secured by Mr Musk's holdings.
It means that if Tesla's stock starts to fall in value, it might derail a deal based on the stock's intrinsic worth.
"If Tesla's stock price remains in freefall, his finance will be jeopardized," said Ed Moya, senior market analyst at Oanda.
Mr. Musk isn't the first businessman to establish many businesses. Apple and Pixar were both created by Steve Jobs. Twitter and Block were both led by Jack Dorsey.
Running five firms, on the other hand, necessitates entrusting others with running them effectively on your behalf.
And, as a self-described "nano-manager," Mr Musk's nature clashes with this.
He previously stated that he did not want to be Tesla's CEO. Why, I inquired? He stated emphatically that he did not want to be the CEO of any company.
It's possible. He does, however, want to be a part of the day-to-day operations of these businesses.
Mr Musk was working at Space X when the Twitter offer was accepted, according to his biographer, Walter Isaacson, on Tuesday. He went to a meeting about engine design at 10 p.m. that evening.
"He worked on valve leak remedies for well over an hour. Twitter was not mentioned. He's a multitasker, to say the least "He expressed himself.
It is undeniable that Mr. Musk is a multitasker. Will he be able to spin so many plates at the same time without them collapsing?
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Some are now questioning if he has the time to do so without causing harm to the others.
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