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Elon Musk’s revived Twitter deal will probably be disastrous for Tesla, Wedbush Securities analyst Dan Ives has warned.
A big chunk of Musk’s $250 billion fortune is tied up in Tesla shares and his stake in SpaceX. Ives mentioned that Musk must offload extra Tesla shares to fund his takeover try – which may result in the electrical automobile maker’s inventory falling additional.
“That is like me freely giving caviar to purchase a $2 slice of pizza,” Ives instructed BBC’s ” At the moment” present Wednesday.
On Monday, Musk proposed restarting talks to purchase Twitter on the originally-agreed worth of $54.20 a share in a letter addressed to the social media large’s legal professionals, based on a Securities and Alternate Fee submitting.
Twitter sued Musk in July after he mentioned he was terminating his deal to buy the corporate. His backtracking means he may keep away from a pricey courtroom battle.
Musk, who’s each Tesla’s largest shareholder and the world’s richest individual, has trimmed down his stake within the electrical maker this 12 months in a bid to boost money to fund his Twitter takeover try.
He offloaded $6.9 billion in Tesla shares in August, which means he has reduce down his stake by round $32 billion over the past 12 months.
Ives mentioned on the time that Musk’s Tesla inventory sale was “writing on the wall {that a} deal could possibly be on the playing cards” — and upgraded his Twitter worth goal from $30 to $50 a share.
Tesla fell 1.26% to commerce at $246.29 in Wednesday’s premarket, whereas Twitter slipped 0.48% to $51.75.
Learn extra: Learn Elon Musk’s letter to Twitter saying he’ll honor the unique $44 billion deal if there’s an ‘fast’ finish to their court docket battle
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