Elon Musk¡¯s deal for Twitter has features that make it risky, including billions of dollars of personal debt. If it goes wrong, it could burn Tesla shareholders and strain Twitter¡¯s financial health.
There are already signs of investor concern. As Tesla has become one of the world¡¯s most valuable companies, its stock has become widely owned by retail investors through mutual funds and other investment vehicles. But it has fallen 24% since the disclosure early last month that Musk had taken a sizable stake in Twitter, a period in which the S&P 500 has declined 10%.
¡°Even if he¡¯s able to finance it, it just is not a sensible deal from a financial perspective,¡± said Aswath Damodaran, professor of finance at New York University¡¯s Stern School of Business.
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