Tesla’s worst full-year stock performance has investors voicing misgivings about the CEO’s involvement with Twitter and other matters.
Key Details
- Tesla CEO Elon Musk has been busy with Twitter, his newly acquired social-media company, and investors say this new venture is the reason behind Tesla’s ongoing struggles.
- The electric-vehicle company is experiencing its worst full-year stock performance.
- “There is no TSLA CEO today,” tweeted Future Fund managing partner Gary Black. Future Fund owns nearly $50 million in Tesla stock.
- On Monday, Tesla shares fell more than 6% following a weekend full of tweets from Musk that caused a stir online.
- Black continued by saying that Musk’s involvement in “the Twitter drama” negatively affected the company and made Teslas too controversial.
Why it’s news
So far this year, shares of Tesla have declined 54.31%, and it will likely be the company’s worst year. Since acquiring Twitter earlier this year, Musk has spent significant time at the social media company making sweeping changes. Now, investors are questioning whether or not the billionaire should be in the Tesla or Twitter office.
Musk has previously expressed that he plans to transfer control of Twitter to someone else, but he hasn’t shared who that might be or when that could happen.
Tesla stock took a hit shortly after Musk announced interest in Twitter, but critics like Black have argued that the wave of criticism Musk now faces is damaging the company.
“Where before EV buyers were proud to drive their Teslas to their friends or show off Teslas in their driveways, now the Twitter controversy is hurting Tesla’s brand equity,” Black tweeted.
Before Musk made the Twitter deal, Tesla investors were already against the idea. After Musk announced interest in the company, shares of Tesla dropped almost 30% from April to May. Since the deal closed in October, Tesla’s stock has dropped nearly 28%
In response to the decline, Musk tweeted, “Tesla will be great long-term, but doesn’t control macroeconomic tides.” A later tweet continued, “I will make sure Tesla shareholders benefit from Twitter long-term.”
Musk shared in October that Tesla could be open to a $5 billion to $10 billion share buyback. Over the course of this year, Musk himself has sold around $19 billion in Tesla stock. Approximately $4 billion of that was used to finance his Twitter purchase.
