On Tuesday, the electric carmaker's stock lost around $126 billion in value, a day after Musk struck a deal to buy the micro-messaging service.
The company has a market cap of $906 billion, down from $1 trillion on Monday.
According to multiple media outlets, the pressure on the stock of the company is due to concerns over how Musk is financing his takeover. The billionaire has secured a $12.5 billion loan against his shares in the electric car company, as well as a $13 billion loan from Wall Street.
Musk has agreed to pay the remaining $21 billion but hasn't said how he'll dig up the funds, fueling investor concerns that he may sell off a lot of his stock to cover the cost.
The value of Musk's stake in the two companies has plummeted since April 4, when he first disclosed that he had bought a stake in the micro-messaging service. Since then, the EV maker&s share value has fallen by a quarter of a billion dollars, or $275 billion.
Fears that the billionaire will sell some of his stock for the takeover are causing a bear festival in the name, according to an analyst.
If Musk were to sell his shares as a condition of securing a personal loan, the stock price would decline.
In November of last year, Musk sold off $5 billion of hisTesla stock due to tax issues and expired stock options.
The company reported an 81% increase in revenue for the first quarter. On April 2, the company announced that it had delivered a record number of cars despite facing supply chain issues.
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