• Tesla stock closes under $1,000 as Elon Musk takes over Twitter.
  • TWTR stock tracks TSLA stock falls on reports of TSLA shares being pledged as security.
  • TSLA had produced strong earnings only last week but the stock has not pushed on.

Update: Tesla (TSLA) plunged 12.18% on a terrific Tuesday trading, once again dominated by the Twitter takeover theme. TSLA stock lost $126 billion in value as investors fretted that CEO Elon Musk may have to sell Tesla shares to fund his $21 billion equity contribution to his $44 billion Twitter takeover bid. Adding to this, concerns over slowing global growth and aggressive Fed tightening weighed heavily on the tech stocks, leading Nasdaq Composite Index (NASDAQ) to close at its lowest level since December 2020. The slump in Tesla shares could be a cause for concern for Musk, as it could jeopardize financing his Twitter deal. The shares of the EV giant closed Tuesday at $876.42, way below the $1000 threshold.

Tesla (TSLA) stock was left in the shadows on Monday something it is not accustomed to. But fear not it is likely to be short-lived as the Technoking of Tesla now has the world's largest advertising board for Tesla. Elon Musk made good on his takeover offer for Twitter as the Twitter board did a sharp about-turn once they smelled the green in front of them. Only last week they had strongly defended themselves against Elon Musk's take over offer. Musk offered to buy Twitter for $54.20 per share all-cash in a final take it or leave it deal. The Twitter board met to consider the offer and adopted an aggressive poison pill defense mechanism. This is an unusual move and allows a company to issue stock to existing shareholders while diluting the potential purchaser. It appeared they were hoping to buy time for a white knight bidder to appear over the horizon but no savior was forthcoming. 

Also read: SOS Stock Price: Sos Ltd snaps losing streak despite hitting a new 52-week low price

Tesla (TSLA) stock news

All this of course is of mild interest to Tesla (TSLA) shareholders, but what is more interesting is the news that Tesla (TSLA) stock has been put up as security for the Twitter takeover deal. Various reports seem to be in agreement that Morgan Stanley has stumped up $25 billion for the deal in loans with $12.5 billion secured against Tesla (TSLA) stock. The last time we had a block sale of $10 billion or more in Tesla was Elon's famous Twitter poll. That led to Tesla shares dropping about 11%. In the big scheme of things, it is not all that significant when you consider the market cap of Tesla. What should be more concerning is the further suite of lockdown going on in China. Covid is finally making significant inroads and Shanghai is now facing more lockdowns as is Beijing. Giga Shanghai has been suspended but the factory last week resumed operations and over 8,000 workers returned to the plant. It is as yet unclear how these further lockdowns are affecting Giga Shanghai and suppliers to the plant. On Monday Apple supplier Foxconn was forced to close two factories in Shanghai after covid cases. 

In other related news, two tech titans and the current world's richest man Musk took on the former world's richest man Bill Gates in a conversation that has quickly gone viral. Elon Musk according to various reports and leaked screenshots asked Bill Gates if he was short Tesla to which Gates is alleged to have replied that he was. At least your author is in good company then (I am currently short). But Tesla stock may be due for a turnaround after a strong close for markets yesterday. Tesla last week announced strong earnings which did not see the share price get the follow-through it deserved. I had expected to be stopped and still do. Tesla looks ready to rally and I may even reverse and go long, don't worry I'll keep you all updated. I know my positions are closely followed by all of you! 

Tesla (TSLA) stock forecast

$975 is holding as strong support and is the short term pivot point. Equity markets put in a strong rally late on Monday. But earnings season is upon us so expect some hesitation until we get a bit more clarity this week from Apple (AAPL), Microsoft (MSFT), Google (GOOGL), Amazon (AMZN), and others. $975 and $945 are strong support with $900 then the 200-day moving average. Holding and the high at $1153 is the first target.

Tesla (TSLA) stock chart, daily

The author is short Tesla stock

Previous updates

Update: Tesla (TSLA) was caught up in the risk-off sentiment on Tuesday and dropped heavily below its sideways consolidation channel, falling all the way to test daily support in the lows, a touch below $880.00. However, given the weekly M-formation, a reversion pattern, the price could be in for a correction from daily support. Pulling up the Fibonacci scale along the weekly bearish impulse, a 23.6% retracement meets the early 2022 resistance near $925.00. further up, the neckline of the M-formation has a confluence with a 50% mean reversion of the bearish impulse around $983.60. On the other hand, the bears could stay with the trend and mitigate the price imbalance for the March 2022 rally to $756.00.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures