Tesla's stock, and Elon Musk's fortune, both plummeted on Friday, continuing a downward trend and putting the billionaire's proposal to buy Twitter in jeopardy. During Friday's trade, shares of the electric car firm, from which Musk derives much of his income, fell more than 10%, to around $636 per share. That's a 35% reduction from the day Musk revealed his deal to buy Twitter.
The drop in Tesla's price could have a bigger impact on Musk's fortune than you might think. Tesla's stock plunged by more than double the price of Twitter on Tuesday. Musk has taken out large personal loans that are significantly reliant on Tesla's stock price. He has backed them with as much as 50% of his Tesla stock as collateral.
Musk, the richest man on the planet, tried to buy Twitter earlier this year. The company and the executive agreed to a $44 billion contract last month, but Musk claimed the agreement was on hold while he looked into the number of automated bots on the site.
Analysts believe it could be a ruse to renegotiate the price, which he has indicated he may try. Furthermore, if Musk can establish that he was deceived about the number of false accounts, he will be able to walk away under a major adverse effect provision. Musk is partially financing the Twitter purchase with financial commitments based on his Tesla equity.
He's also facing a claim made in a news report, which he denies, calling the item a "politically motivated hit piece" meant to derail the Twitter transaction. The S&P 500 fell into a bear market on Friday, as investors worried about inflation and global economic issues.
Musk's personal debts could have a negative impact on Tesla's shares, according to the company's annual report. Tesla's stock price has dropped to one of the lowest levels since he reclaimed the title of world's richest person in September of last year. According to the Bloomberg Billionaires Index, Musk was valued $212 billion on Friday, down from $259 billion when he initially revealed his plan to buy Twitter.
The Tesla CEO is shaking up politics with his tweets on Friday. Despite its dominance in the electric vehicle business, Musk accused the Biden administration of doing "all it can to sideline" and ignore Tesla in a tweet.
Musk, who is in talks to buy Twitter for $44 billion, suggested on Thursday that Democrats will launch a smear campaign against him after he revealed his support for Republican candidates.
“In the past I voted Democrat, because they were (mostly) the kindness party. But they have become the party of division & hate, so I can no longer support them and will vote Republican,” Musk tweeted on Thursday. He then added, "Now, watch their dirty tricks campaign against me unfold."
As predicted, several hours later on Thursday, stories surfaced detailing claims against a flight attendant. These allegations have been refuted by Musk.
Musk was quick to address these allegations:
“The attacks against me should be viewed through a political lens – this is their standard (despicable) playbook – but nothing will deter me from fighting for a good future and your right to free speech.”
Musk meets Jair Bolsonaro
Elon Musk met with Brazilian President Jair Bolsonaro to discuss Amazon rainforest connectivity and other initiatives. According to reports, the initiatives would use technology created by SpaceX and Starlink to bring or improve internet for schools and health facilities in rural areas, as well as to protect the rainforest.
Several agencies, including the national space agency, the federal police, and the environmental regulator Ibama, keep an eye on illegal activity in the huge Amazon jungle that involves loggers and land grabbers. Musk said at the public meeting with the president that he feels technology can play a large part in monitoring activities in the Amazon as well as improving the quality of life for people in the region.