Tesla stock slides after Elon Musk terminates Twitter deal

Yahoo Finance auto reporter Pras Subramanian discusses what Elon Musk terminating his deal with Twitter means for Tesla stock.

Video Transcript

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JULIE HYMAN: Tesla shares are lower today after Elon Musk announced his plan to terminate his $44 billion Twitter takeover. Yahoo Finance's Pras Subramanian joins us now to discuss what that means for the company. I mean, it's interesting. You actually-- you might have expected that the shares would go up once this finally happened, as many suspected it would.

PRAS SUBRAMANIAN: Yeah. I think maybe today's a broader market issue, right? But yeah, an overhang for the stock is removed now for Tesla shares. You know, I reached out to Garrett Nelson of CRFA to talk about how this is kind of, like, this Twitter meltdown removal. It's a positive for Tesla. Musk was potentially biting off more than he could chew there with this portfolio companies, like SpaceX, and Tesla, and Neuralink, and Boring. It takes another thing off his plate to kind of focus more on Tesla.

And also, it's good for Tesla, but also good for Elon Musk. Like, we pointed out that he sold around $8 billion worth of shares over two or three different periods in the last six months. And if you'll notice-- and we have a full screen here-- that he sold kind of near the top, right? So he actually kind of did well for himself. He said it was because of tax reasons that he's, like, actually, I'm buying Twitter. So you know, he actually did well for himself there.

Also good for him there maybe. We'll see what he does with that money later. But it's not a bad thing for him, and the stock too. I think for the company, it's a good-- for the company, it's a good kind of thing to remove of the plate for investors as well.

BRIAN SOZZI: Pras, I thought that too. But the more I watch this Tesla action, I have to wonder that Musk is going to be mired in a legal battle with Twitter for months. You have to think about, well, does that distract him even more.

PRAS SUBRAMANIAN: Yeah, I know. I mean, at this point, it's kind of like he sort of said, OK, lawyers, you take over, we'll just pay the breakup fee, which, of course, is a whole other issue, because you can't really do that without any kind of, you know, let's say the government steps in to break it up. You can't just say I'm going to walk away. So yeah, it is a sort of distraction for him, I guess, going forward. And he's already tweeting about it today, talking about, hey, if we go into a lawsuit, I can actually see these bot numbers now, right?

So maybe he will get wrapped back up into it, because he seems like he can't let it go either.