Investors speculating on whether Elon Musk will complete his $44 billion acquisition of Twitter Inc sent the social media company’s stock to its lowest level since the transaction was disclosed two days ago on Wednesday.

Traders were concerned that Musk might not have enough cash on hand to fund his $21 billion cash commitment and might decide to sell some of his Tesla Inc shares to make up the difference.

He has previously reversed his position. Earlier this month, he decided at the last minute not to join Twitter’s board of directors. Musk tweeted in 2018 that “financing has been secured” for a $72 billion plan to take Tesla private, but did not proceed with an offer.

Furthermore, Musk would just have to pay a $1 billion breakup fee – a portion of his fortune, which Forbes estimates to be $240 billion – to walk away from the transaction.

“There’s a lot of headline risk over the next six months that it takes to complete the deal,” said Chris Pultz, portfolio manager for merger arbitrage at Kellner Capital.

Musk’s representatives did not react quickly to demands for comment.

According to reports, Twitter shares closed trading in New York down 2.1 per cent at $48.68, a significant discount to the $54.20 transaction price, meaning a 62 per cent possibility of the deal being completed. Investors believe the transaction has a minimal probability of success since Musk, who owns no other media companies, is unlikely to face antitrust investigation.

Tesla shares plunged more than 12 per cent on Tuesday, wiping out $126 billion in value, as investors worried Musk would have to sell Tesla stock to cover the $21 billion equity payment in the Twitter acquisition.

Musk could calm some of the market jitters by providing more details on the source of his equity financing or bring in partners to help split the check. This, however, could introduce new risks to the deal based on the identity of these partners, some fund managers said.

The $1 billion agreement termination fee, according to Roy Behren, managing member of Westchester Capital Management, which manages $5.4 billion in assets, was not enough to make Musk reconsider walking away from the project.

“In the context of his net worth, and the size of the transaction, the fee is smaller than one would have expected,” Behren said.

(Adapted from MoneyControl.com)