Why Tesla Shares Dropped Wednesday
Tesla (NASDAQ: TSLA) shares have now plunged more than 20% in less than 20 days. There are several reasons for that, but a new catalyst now has the drop gaining momentum. Today, as of 10:34 a.m. ET, the stock is trading at its morning lows down 5.4%.
Today's move lower was sparked by the news that Tesla CEO Elon Musk has reversed course and now intends to follow through with his bid to purchase Twitter for his original offer price of $54.20 per share. Musk has been fighting in court to back out of the deal, but now intends to spend the full $44 billion he originally offered. That's likely the part that has Tesla shareholders on edge today. But it shouldn't be the only point of concern.
Musk already sold about $20 billion in Tesla stock between over a six-month period beginning late last year. He sold an additional $7 billion in August as the fate of his fight to back out of the deal remained uncertain, and he might be forced to pay the full amount. Now he has agreed to that, and Wedbush analyst Dan Ives thinks he might sell another $2 billion or $3 billion of Tesla stock, according to Barron's.
Source Fool.com
