Elon Musk sells another $3.6 billion worth of Tesla shares
If Tesla shareholders were already concerned that Elon Musk would be too distracted by his new position as chief executive at Twitter, they now have more reason to be upset: Mr. Musk revealed on Wednesday that he had sold for 3.6 billions more worth of Tesla stock, perhaps to prop up its beleaguered social network.
Mr Musk has now sold $23 billion worth of Tesla stock this year, largely after promising in April to stop selling shares to fund his Twitter deal.
He alluded to what he was doing on Tuesday, saying on Twitter, “Beware of debt in turbulent macro conditions, especially when the Fed continues to raise rates.” This suggests he plans to either buy back some of Twitter’s billions in debt – including the $13 billion he took on as part of his takeover – or, perhaps less likely, buy back some of the shares. of the society.
None of this will reassure Tesla shareholders, who are worried about the automaker’s share price down about 61% from its peak in late 2021 – and a chief executive who has admitted spending almost everything its time on Twitter these days. Wednesday, Leo Ko Guanone of Tesla’s biggest individual investors, said on Twitter: “Tesla needs and deserves a full-time CEO”
Tesla’s stock plunge is a sharp break from the days when its rise lit up the stock market and gave the company a market value of more than $1 trillion. This year, the stock has not only lagged the broader market, but also more established automakers that are competing more aggressively with Tesla in the fast-growing electric vehicle space. Some investors and analysts worry that the competitive challenges Tesla faces come at a time when Mr. Musk appears not only distracted, but also possibly selling Tesla stock to shore up his purchase of Twitter.
Tesla stock closed 0.6% higher at $157.67 on Thursday after falling for three straight days. Factoring in a stock split, shares briefly traded above $400 at the end of 2021.
“Twitter’s nightmare continues as Musk uses Tesla as his own ATM to continue funding red ink on Twitter,” Wedbush equity analyst Dan Ives wrote in a note to clients on Thursday. Some investors are also concerned that Mr. Musk’s confrontational and inflammatory statements on Twitter could damage the Tesla brand and discourage customers, especially people who buy electric cars to reduce emissions responsible for climate change.
Some boards will step in if a chief executive seems distracted or too focused on other businesses, but Tesla directors, some of whom are longtime friends of Mr. Musk, have been widely criticized by corporate governance experts. company for not doing much to reprimand or restrain him. .
At the same time, Mr. Musk has been busy suspending accounts on Twitter. Most notable of these was @ElonJet, the brainchild of Jack Sweeney, a 20-year-old college student who relied on public data to track Musk’s private jet.
The move signifies a change 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 the account suspension based on a change to its rules that appears to have been put in place in the last 24 hours.
A new poll suggests some chief executives remain suspicious of what Mr Musk is doing on Twitter. At Yale’s invitation-only CEO Summit, held this week, attendees were asked to speak on key business topics. Here’s where those leaders stumbled upon some of them:
56% of respondents said companies should stop advertising on Twitter (although a majority later said their own companies hadn’t).
69% said they thought Twitter’s best days were behind it, while 79% said Mr Musk had become a detriment to the value of his businesses.
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