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Tesla stock drops as Elon Musk leverages shares for Twitter purchase

Thursday night, Musk sold more than $8 billion to help cover some of the cost of the $44 billion acquisition of the social media giant.

AUSTIN, Texas — Since Monday's Twitter acquisition announcement, Tesla's stock has dropped by 11%. Thursday night, Elon Musk, the company's CEO, sold off more than $8 billion to help with the acquisition.

"Now he's leveraged about 15% of his ownership to buy Twitter and, ultimately, it's Tesla investors that feel the brunt of that uncertainty," Dan Ives, a Wall Street tech analyst at Wedbush Securities, said Friday. "Tesla investors, they own it to be in on the biggest transformation in terms of the auto industry since the 1950s, the electronic electric vehicle industry. And, ultimately, they didn't want to be exposed to the Twitter saga, and that's essentially what's happened."

Some Tesla owners in the Austin area told KVUE the Twitter acquisition is really here nor there for them. Ives followed up saying it's just a bump in the road for Tesla.

"We've been through many sorts of white-knuckle periods with Tesla. This is just a small speedbump," Ives said.

Musk may be the richest man on earth, but he's not using all his cash to acquire the social media giant. The acquisition comes as a blend of multiple funding avenues.

"He essentially took out about $12.5 billion of debt, and there's about $21 billion of equity that's really leveraging or using his Tesla shares as collateral," Ives said. "That's why what's happening is that Tesla stock shows some of the risk because he's using Tesla stock to pay for Twitter. Ultimately, in this game of thrones, the easy part for Musk was winning, ultimately getting Twitter. The hard part is going to be fixing it."

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