- Tesla stock falls as speculation mounts surrounding TWTR acquisition financing.
- Elon Musk looks to finally take over Twitter.
- Twitter stock rallied but still trades at a near 10% discount.
The will, he won't he debate surrounding Tesla (TSLA) CEO Elon Musk and his bid for Twitter continues to rumble. Twitter (TWTR) stock initially soared on Tuesday as reports broke that the deal looked like it was on. Tuesday saw news break that Musk's lawyers had written to Twitter to say the deal could go ahead subject to some conditions. Twitter shares spiked, while Tesla stock fell. The trend continued on Wednesday as speculation over the financing of the deal continues.
Tesla stock news
The recent delivery data from Tesla had seen a sharp decline in the stock price. Tesla announced last Sunday it had delivered 343,830 vehicles, less than analysts' expectations of near 358K. The number was still a delivery record for Tesla, but the stock fell sharply on Monday. It closed nearly 9% lower at $242.40. Tuesday saw a brief rally before more selling followed on Wednesday as the Twiter news broke.
Tesla is seeing selling pressure as investors assume Musk will have to sell a chunk of Tesla or pledge a lot of shares to lenders to complete the Twitter deal. Also of note is a Reuters exclusive saying Apollo Global (APO) and Sixth Street Partners are no longer in talks with Musk.This presumably puts more emphasis on the Tesla side of the equation. However, some long-term supporters are still backing Tesla. The latest reports show that ARK Invest's Cathie Wood stepped up to buy the dip with the noted fund manager buying Tesla stock after the sharp fall on Monday. While the deal for Twitter looks closer than ever to being completed, the market still is reacting with a certain skepticism. Twitter shares are trading some $4 below the offer price, indicating risk in the deal completing or even completing quickly.
Tesla stock forecast
Tesla stock then is likely to remain under pressure until some clarification comes to light, both in terms of the deal's financing and when or if the deal is set to proceed. Reports indicate that one of the conditions in the letter from Elon Musk's lawyers to Twitter states that it is conditional on financing. This seems likely to go through given Musk's large Tesla holding, but the banks involved are set to take major losses on the transaction. "Leveraged financing sources have also previously told Reuters that potential losses for Wall Street banks involved in the Twitter debt in such a market could run to hundreds of millions of dollars," according to a report carried by CNBC.
There is still some doubt then concerning when and how the deal is structured in my view and the uncertainty is likely to weigh on Tesla stock in the short term. Technically, the stock has broken a key support at $254.61, and the next obvious target is the June low of $207. Resistance now comes at $266 from the gap opened on Monday.
TSLA daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD: Further gains retarget 1.1470
EUR/USD alternated gains with losses around the 1.1350-1.1360 band in a context of further weakness in the US Dollar and a generalised improved mood in the risk-associated assets.
GBP/USD still well bid, still focused on 1.3200
The Greenback's current flattish stance lends extra support to GBP/USD, pushing the pair back to around the 1.3200 level as it reaches multi-day highs amid improved risk sentiment on Monday.
Gold trades with marked losses near $3,200
Gold seems to have met some daily contention around the $3,200 zone on Monday, coming under renewed downside pressure after hitting record highs near $3,250 earlier in the day, always amid alleviated trade concerns. Declining US yields, in the meantime, should keep the downside contained somehow.
Crypto AI tokens to watch after Nvidia’s and OpenAI’s latest moves Premium
The crypto AI sector is down 5% on Monday, but top-ranked assets including Render Network, SEI and Bittensor are still posting gains on the seven-day time frame. While traders appear to be taking profits after the late rally last week, fresh news catalyst from Open AI could spark another leg-up in the week ahead.
Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.