Elon Musk's OpenAI Acquisition Rumors Cause Tesla Stock to Drop 6%: A Repeat of Twitter's Nightmare?

Tesla investors are nervous as Musk's potential acquisition of OpenAI raises concerns over distraction and funding struggles

Tesla's stock saw a sharp decline of 6.34% on February 11, 2025, closing at $328.50 per share, marking the biggest drop in five months. This decline has sparked growing concerns among investors, particularly those who remember the significant drop in Tesla’s stock price after Elon Musk’s controversial acquisition of Twitter (now X). The current drop in Tesla stock is largely attributed to the rumors that Musk may be seeking to acquire OpenAI, the company behind the popular AI technology ChatGPT.

The stock drop comes after reports surfaced that Musk, through his investment group, expressed interest in acquiring OpenAI's controlling nonprofit arm and its assets for a staggering $97.4 billion (approximately 141 trillion Korean Won). Although OpenAI’s CEO, Sam Altman, swiftly rejected the offer, the news has sent ripples of concern through the markets, with analysts speculating that Musk’s focus on another high-profile acquisition could distract him from Tesla and lead to financial instability.

In the aftermath of the announcement, Tesla shares plummeted, extending the stock's losses to five consecutive days. This marks the lowest price for Tesla’s stock since mid-November of the previous year, fueling investor fears that Musk’s business ventures outside of Tesla are draining attention and resources. With Musk’s previous venture involving the purchase of Twitter, which led to a significant dip in Tesla’s stock by 33%, investors are once again bracing for potential negative impacts on their portfolios. In 2022, Musk sold off large amounts of Tesla stock to fund the $44 billion acquisition of Twitter, a move that many experts now see as a destabilizing force for the electric vehicle maker’s financial health.

The possibility of Musk successfully acquiring OpenAI has also raised alarms about how Musk would secure the enormous funds required for such an acquisition. Sources close to the matter indicate that the deal would place Musk in a difficult financial position, leaving investors questioning whether Musk would need to sell more of his Tesla holdings to raise the necessary capital. This uncertainty is further compounded by broader macroeconomic concerns, such as the policies of U.S. President Donald Trump, who has recently announced a 25% tariff on steel and aluminum imports. These tariffs could significantly drive up the production costs for Tesla, adding to the already high stakes for the company’s investors.

Adding to the turmoil, the rise of new electric vehicle policies is expected to face possible reversals under the current administration, which could place Tesla at a disadvantage. As these factors converge, Wall Street is watching nervously. Tesla has already experienced a significant drop in stock value from its peak in December 2024, when the stock hit $479.86 per share. Since then, it has declined by 31%, and the company’s recent performance in the NASDAQ 100 further confirms the market’s lack of confidence.

The situation is becoming more concerning for investors as the fear of distraction, funding challenges, and the unpredictable nature of Musk's business dealings seem to be a recurring pattern. Investors are closely monitoring Musk’s next steps, and many are wondering whether Tesla’s future will be affected by Musk’s other ventures or if the company can stabilize amidst the growing uncertainty. The continuing drop in Tesla’s stock price is a stark reminder of the challenges Musk faces in balancing his entrepreneurial ambitions with his responsibilities as the CEO of Tesla.