Tesla stock declines could cost Elon Musk something important
After a slight rebound earlier this week, Tesla's TSLA stock is back to falling, keeping with its recent performance. Even U.S. President Donald Trump's purchase of one hasn’t done much to spark real momentum for the electric vehicle (EV) leader.
After enjoying significant growth throughout the final months of 2024 and through early 2025, TSLA has lost its previous momentum and isn’t showing signs of a rebound. As reports of declining sales and shifting consumer sentiment continue to trend, it's hard to ignore the company’s questionable outlook.
Many of these problems can be traced to CEO Elon Musk, who is preoccupied with his new responsibilities at the Department of Government Efficiency. His absence at Tesla’s manufacturing facilities is being felt as share prices continue to trend downward.
Musk has lost a lot of money as TSLA stock falls, but he could end up losing something else.
Musk’s intertwined business empire could be in trouble
Tesla may be the company for which Musk is best known, but his assets include several other prominent tech names, including SpaceX and X (formerly Twitter). This wide array of responsibilities concerned investors long before he accepted his new position at DOGE.
Now that he has this new position, Musk is spending even less time running his companies, and things haven’t been going well for any of them. While Tesla stock fell last week, a SpaceX rocket exploded during a test flight, and a cyberattack took X down, although users regained access fairly quickly.
This week, reports surfaced that TSLA stock’s poor performance has resulted in significant losses for Musk. On Monday, March 10, he lost roughly $4.7 billion for every $10 the stock price declined, amounting to a total loss of $18.8 billion.
As Musk is still the world’s wealthiest person, that type of loss likely doesn’t mean much right now. However, according to attorney Tristan Snell, Musk’s problems could be about to get much worse if Tesla stock keeps falling, extending beyond the loss of personal fortune.
In the March 12 post, Snell highlights that Musk initially used his TSLA stock holdings as collateral to purchase X in 2022, ultimately financing the $44 billion dollar deal by using his own money, loans from banks, and equity investments. “If Tesla stock keeps crashing, the banks/creditors could repossess Twitter,” he states.
That means Musk could be at significant risk unless Tesla stock reverses its direction quickly. But as Irina Tsukerman, U.S. national security lawyer and President of Scarab Rising Inc., notes, the details of Musk’s financing of X have evolved since the purchase.
While Tsukerman notes that Musk originally planned to use a $12.5 billion margin loan backed by his Tesla shares to help fund the X acquisition, he ultimately opted to restructure the deal, replacing it with more equity financing, outside investor contributions, and personal cash.
“That restructuring untied Tesla stock from the X deal in a direct collateral sense, so X stock cannot be directly repossessed in that way if Tesla stock plunges,” she states.
More may be at stake for Musk than first meets the eye
Even if a further drop in Tesla stock can’t lead directly to X being repossessed, as Snell suggests, Musk should still be concerned about losing control of the social media platform.
As Tsukerman adds, the intertwined nature of his business empire puts him at continuous risk.
Related: European tech companies reveal strategy to take on Elon Musk
“While Tesla stock is no longer collateral for the Twitter deal itself, its decline could weaken Musk’s ability to sustain X, making creditor action more likely,” she notes. “Musk’s financial empire remains interconnected, and a Tesla stock collapse would have profound ripple effects across his holdings, including X.”
As Tsukerman sees it, further financial instability sparked by Tesla stock’s declines could lead to Musk being forced to give up control of X, “either by forced asset sales, investor pressure, or creditor action.”
While Musk’s future remains highly uncertain, it is clear that his risk will intensify as long as TSLA falls, and investor confidence in him will diminish. The question remains as to how bad he will let things get. Right now, there doesn’t seem to be a clear answer.
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