Tesla’s market capitalisation began its slide from April 4, when Mr Musk announced he had increased his stake in Twitter. On April 4 the share price was $US1145.45 ($A1584.27) – this week it was $US876.42 ($A1212.18), a drop of 23 per cent.

Shareholder concern centres on Mr Musk selling his Tesla stock to pay for the $US44 billion ($A61b) purchase of Twitter. They note that his 17 per cent of Tesla has fallen in value since April 4 by $US42 billion ($A58b), almost double the equity portion he promised in the Twitter transaction.

Some investors remain concerned about plans by Mr Musk, who is worth $US268 billion ($A371b) according to Forbes, to finance the Twitter deal. 

Twitter said Mr Musk secured $US25.5 billion ($A35.3b) of debt and margin loan financing and is providing a $US21 billion ($A29b) equity commitment. It is unclear – but feared – if Mr Musk will sell Tesla shares to help fund the deal.

Elon Musk

He holds 172.6 million shares in Tesla and has already borrowed against about half of his stock, according to Tesla filings.

Reuters said that if he puts up more shares as collateral to secure margin loans of $US12.5 billion ($A17.3b), he may be left with roughly 30 million unpledged shares.

Hinging on all this valuation is the price of Tesla shares. In an article by Automotive News, Tesla’s share price fall has been put into context with a general slowdown in the global equity markets attributed to a slower economic expansion and persistent inflation. 

“In addition, investors have fled high-growth companies as the US Federal Reserve prepares to embark on a series of significant rate hikes,” the article said.

“But Musk isn’t doing Tesla any favours by providing scant details on how he will cover the $US21 billion ($A29b) equity piece that he personally guaranteed. 

“What’s known is that Musk is using Tesla shares as collateral in the transaction. That has led to investors worry that the Tesla CEO may sell some of his stake to fund the Twitter acquisition.”

Automotive News quoted chief market strategist at National Securities Corporation as stating: “Apart from the worries about a share sale and a wider selloff in growth stocks, Tesla shares are also reflecting some concern that Elon Musk could be spreading himself and/or his bench too thin taking on this new challenge.”

The concerns come despite Tesla reporting record quarterly results announced only in the previous week, and that before April 4, its shares were the best performers among the high-profile growth stocks this year.

Still, the risks to Tesla’s stock price remain as the uncertainty surrounding the shares continues.

The move by Mr Musk to buy Twitter has also raised concerns about the depth of executive talent at Tesla with fears that his attention will be diverted away from Tesla.

Tesla, founded in 2003, has grown into the most valuable automaker but there are only two executives listed along with Mr Musk in its leadership team on the company website, compared with 17 at General Motors and 11 at Volkswagen Group.

Tesla’s current high-profile leadership outside of Mr Musk includes CFO Zachary Kirkhorn and senior vice president Andrew Baglino, who handles the powertrain development. 

Dakota Wealth senior portfolio manager Robert Pavlik, based in Connecticut, told Automotive News that Mr Musk could simply install someone else to lead Twitter.

“It seems like that would be the most logical thing,” he said. “It seems like he has his hands full with Tesla and SpaceX.”

Tesla investor Ross Gerber, CEO of wealth management firm Gerber Kawasaki in an Automotive News interview, said Mr Musk could need a strong number-two executive like he has at SpaceX with president Gwynne Shotwell.

“Tesla feels very much like a startup despite it being a trillion-dollar company,” he said.

“It’s as big or bigger than the biggest companies in the world, but it doesn’t have the management infrastructure like other companies.”

Compounding that is Tesla racing to boost production at new plants in Texas and Berlin while dealing with supply-chain holdups and rising prices of raw materials. It also has to get its Shanghai plant back to full production during the current lockdowns because of COVID-19.

Automotive News said that Tesla could not be reached for comment, but that “one insider at the company who asked not to be identified said investor concerns were ‘overdone’ and Musk was still heavily engaged at the automaker.”

Mr Musk also leads rocket company SpaceX, as well as brain-chip startup Neuralink and tunnelling venture the Boring Company.

By Neil Dowling