Tesla’s stock plunged $126 billion the day after Elon Musk struck a deal to buy Twitter for $44 billion

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Tesla’s stock plummeted more than 12% on Tuesday, losing around $126 billion in value a day after Elon Musk, the electric carmaker’s CEO, struck a deal to buy Twitter for $44 billion.

The company’s market capitalization is now $906 billion, down from more than $1 trillion on Monday. 

According to multiple media outlets, the pressure on Tesla’s stock largely stems from concerns over how Musk is financing his Twitter takeover. The billionaire has obtained a $12.5 billion loan secured against his Tesla shares — he owns a 17% stake in the EV company — and another $13 billion borrowed from Wall Street.

Musk has agreed to pay the remaining $21 billion but hasn’t said how he’ll dig up the funds, fueling investor concerns that he may sell off a significant portion of his Tesla stock to cover the cost.

The value of Musk’s stake in Tesla had plunged by $40 billion since April 4, when he initially disclosed that he had bought a 9.2% stake in Twitter, Bloomberg reported. Since then, Tesla’s stock dipped several times before Tuesday’s sell-off, resulting in a total 23% drop — or $275 billion — in the EV maker’s share value this month.

Fears that the billionaire will unload some of his stock for the takeover are “causing a bear festival in the name,” Wedbush analyst David Ives told Bloomberg.

Tesla even forewarned earlier this year that its stock price would suffer if Musk sold its shares as collateral. “If Elon Musk were forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to decline,” the company said in its latest annual filing.

In November, Musk sold off $5 billion of his Tesla stock due to expiring stock options and a $10 billion tax bill that he was facing, Insider’s Tim Levin previously reported.

Last week, Tesla reported an 81% year-on-year increase in its revenue for the first quarter. In addition, on April 2, the company announced that it had delivered a record number of cars over the same period, despite facing supply chain issues.