Elon Musk Buying TikTok Could Hurt Tesla Stock, Warns Gary Black — But Wedbush's Dan Ives Thinks It Makes Sense
Tesla Inc. (NASDAQ:TSLA) investor Gary Black has expressed concerns about Elon Musk acquiring TikTok's U.S. operations.
What Happened: Following the report about Chinese officials considering Musk as a potential buyer of TikTok, Black took to X, formerly Twitter, and said, "A purchase of TikTok will hurt $TSLA shares."
Black warned that Musk’s acquisition could negatively impact Tesla’s stock, as it might require selling billions in Tesla shares to fund the estimated $40-$50 billion deal.
He noted that a similar situation occurred after Musk’s Twitter purchase, leading to a significant drop in Tesla’s share value.
See Also: TikTok Ban Deadline Ahead: What Will Happen To App On Your Phone?
Meanwhile, Wedbush analyst Dan Ives has suggested that Musk’s existing relationship with both the Donald Trump administration and Beijing could facilitate the deal.
In a note on Tuesday, Ives noted, "Given the strong and growing alliance between Trump and Musk this is not a total shock route as behind the scenes the Trump White House is looking at alternatives if the Supreme Court upholds the ban."
A TikTok spokesperson earlier countered Bloomberg's report about Musk's potential acquisition of TikTok saying, “We can’t be expected to comment on pure fiction.”
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Why It Matters: TikTok users have been actively campaigning to prevent the ban, urging President-elect Trump to intervene. Earlier, it was reported that Trump is considering an executive order to save TikTok from the impending ban.
Jimmy Donaldson, also known as MrBeast has also expressed interest in acquiring TikTok, engaging with several billionaires to explore the feasibility of such a purchase.
Other potential buyers reportedly include Microsoft Corporation (NASDAQ:MSFT) and Oracle Corp. (NYSE:ORCL), along with a group spearheaded by “Shark Tank” investor Kevin O’Leary.
If an agreement isn’t finalized by the deadline, TikTok will face removal from U.S. app stores on Sunday, Jan. 19.
Price Action: Tesla’s stock climbed 8.04% on Wednesday, closing at $428.22. However, in after-hours trading, it slipped 0.63% to $425.54, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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