Tesla's Drop Against Modestly Lower Nasdaq Comes As Investors Weigh Elon Musk's $40-50 Billion TikTok Deal, Gary Black Says TSLA Share Swap Unlikely Due To This Upcoming Milestone

Tesla Inc. TSLA shares dropped 3.6% on Thursday, underperforming the Nasdaq’s 0.9% decline, as investors weighed speculation regarding CEO Elon Musk‘s potential acquisition of TikTok‘s U.S. operations ahead of the platform’s upcoming ban deadline this Sunday.

What Happened: Gary Black, managing partner of The Future Fund LLC, expressed concern on X that Musk might need to sell billions in Tesla shares to fund a possible $40-50 billion TikTok acquisition.

“Frankly I can’t see Elon Musk swapping TSLA shares for TikTok’s US business given that TSLA is on the verge of achieving generalized unsupervised autonomy but one never knows,” Black wrote.

Tesla’s stock previously experienced a 70% drawdown between April 2022 and January 2023, which Black attributed partially to Musk’s Twitter acquisition and Tesla’s subsequent EV price cuts.

“We certainly see the business logic for X, but don’t like the overhang it would create on TSLA shares,” Black wrote, drawing parallels to Tesla’s stock pressure following Musk’s Twitter purchase.

In an otherwise modestly lower market (NDX -0.3%), $TSLA -3.6% today on continuing speculation that Trump wil help negotiate a sale of TikTok's US operations to X, which could cost $40B-$50B. We certainly see the business logic for X, but don't like the overhang it would create… pic.twitter.com/GbURfJ4dBy

— Gary Black (@garyblack00) January 16, 2025

See Also: Charlie Munger Said His Family Only Owns 3 Stocks – ‘Damn Right’ They’re Rich Because Diversification Is For ‘Know-Nothing Investors’

Why It Matters: The speculation comes as TikTok approaches a critical Jan. 19 deadline when it faces removal from U.S. app stores. While President-elect Donald Trump is reportedly considering an executive order to temporarily suspend the ban, potential buyers are emerging.

Wedbush Securities analyst Dan Ives noted that Musk’s relationships with both Trump and Beijing could facilitate a deal.

TikTok, which employs nearly 17,000 people in the U.S., has dismissed the acquisition rumors as “pure fiction.” Other potential buyers include Microsoft Corp. MSFT, Oracle Corp. ORCL, and a consortium led by investor Kevin O’Leary.

The social media platform has seen a 38% increase in employee departures in late 2024 compared to the previous year, though it maintains over 2,000 job openings across U.S. locations.

Read Next:

• Cathie Wood Adds New Space Stock To 2 ETFs: Company Went To Moon, Will Investment Returns Follow?

Image Via Tesla

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.