Twitter’s owner has now sold $23 billion worth of Tesla stock this year, largely after he pledged to stop selling stock in April to fund his deal to acquire the social media company.
If Tesla shareholders were already worried that Elon Musk was being too distracted by his new CEO position at Twitter, they now have more reason to be angry: Musk announced on Wednesday that he was buying an additional $3.6 billion in Tesla stock. had sold, possibly to support his controversial social network.
Mr. Musk has now sold $23 billion worth of Tesla stock this year, largely after he pledged in April to stop selling stock to fund his Twitter deal.
He hinted at what he was up to on Tuesday, saying on Twitter, “Watch out for debt in turbulent macroeconomic conditions, especially when the Fed continues to raise rates.” That suggests he plans to buy back some of Twitter’s multibillion-dollar debt — including the $13 billion it took on as part of its acquisition — or, perhaps less likely, to buy back some of the buy back shares of the company.
None of this will reassure Tesla shareholders, who are concerned about the roughly 61 percent drop in the automaker’s share price from its late 2021 peak — and a CEO who has admitted that he spends almost all of his time on Twitter these days. On Wednesday, Leo KoGuan, one of Tesla’s largest individual investors, said on Twitter, “Tesla needs and deserves a full-time working CEO.”
Tesla’s stock slump is a sharp break from the days when its rise lit up the stock market and gave the company a market value of well over $1 trillion. This year, the stock has lagged not only the broader market, but also more established automakers competing more aggressively with Tesla in the burgeoning electric vehicle market. Some investors and analysts are concerned that the competitive challenges facing Tesla come at a time when Mr. Musk not only appears to be distracted, but may also be selling Tesla stock to support his purchase of Twitter.
Shares of Tesla rose about 1 percent Thursday morning after falling for three consecutive days.
“The Twitter nightmare continues as Musk uses Tesla as his own ATM to continue funding the red ink on Twitter,” Dan Ives, an equity analyst at Wedbush, wrote in a note to clients on Thursday. Some investors are also concerned that Mr. Musk’s divisive and inflammatory comments on Twitter could harm Tesla’s brand and scare off customers, especially those buying electric cars to reduce emissions responsible for climate change.
Some boards will step in if a CEO seems distracted or overly focused on other ventures, but Tesla’s executives, some of them old friends of Mr. Musk’s, have been widely criticized by corporate governance experts for did little to admonish or restrain him. .
At the same time, Mr. Musk has been busy suspending accounts on Twitter. Most notable among them was @ElonJet, the brainchild of Jack Sweeney, a 20-year-old college student who used public data to track Musk’s private jet.
The move marks a shift in Mr Musk’s approach to Mr Sweeney, after the billionaire – a self-proclaimed free speech absolutist – initially pledged not to suspend the @ElonJets account. Twitter justified suspending the accounts based on a rule change that appears to have been introduced in the past 24 hours.
A new poll suggests some CEOs remain wary of what Mr. Musk is doing on Twitter. At this week’s invite-only Yale CEO Summit, attendees were asked to share their thoughts on key business topics. Here’s where those leaders came down to some of them:
- 56 percent of respondents said companies should stop advertising on Twitter (although a majority later said their own company hadn’t).
- 69 percent said they believed Twitter’s best days were over, while 79 percent said Mr. Musk had become a detriment to the value of his companies.