Twitter’s stock price has been rising steadily since Elon Musk announced he wanted to buy the social media giant, but on the opposite side of the same coin, Tesla’s has nosedived.
Just one day after Twitter announced it had accepted Musk’s offer, Tesla shares went down 12.2 percent and the company has lost more than $100 billion in terms of market value.
So why did this happen?
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A few weeks ago the billionaire offered to buy Twitter at $54.20 per share and now that his offer has been accepted, he’s going to have to fork out about $45 billion to finalise the acquisition.
However, Musk has always maintained he basically owns nothing and the majority of his vast fortune is in Tesla and SpaceX stock.
The stock market is always quick to react to bad and good news, especially when it comes to rumours and speculation, and investors believe Musk will have to sell Tesla shares to raise cash to pay for Twitter.
After the directors of the Twitter board agreed to the sale, Musk said in a statement: “I… want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.
READ MORE: 5 things Elon Musk could change about Twitter
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
Twitter chairman Bret Taylor said the “proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for… stockholders”.
Musk has been a long-time critic of what he thinks is Twitter stifling free speech.
He later clarified his stance: “By ‘free speech’, I simply mean that which matches the law. I am against censorship that goes far beyond the law.
“If people want less free speech, they will ask government to pass laws to that effect. Therefore, going beyond the law is contrary to the will of the people.”
On another note, if you’re a crypto investor, the Dogecoin price went up 30 per cent after the announcement, mainly because everyone knows Musk is a huge supporter of the world’s famous ‘dog’ coin.