Tesla suffers from Elon Musk’s Twitter meltdowns. The question is how much?
It’s hard to be a Tesla fan. The resale value of the company’s once-popular electric cars declines along with the company’s stock. Tesla CEO Elon Musk, meanwhile, is obsessed withoften caused by decisions like his recent moves to temporarily invite back and once banned white supremacists and neo-Nazis.
Later today will be another test as the company releases its fiscal fourth quarter results, in which it will prove the haters right or rekindle the beliefs of many fans in the company.
The past three months have been a whirlwind, even for a company like Tesla, whose mercurial CEO had already become a fixture in the Twitter sphere., while demeaning reporters who ask tough questions. Since paying more than $44 billion to take over as owner and CEO of Twitter, Musk has changed that approach to overdrive, share conspiracy theories, attack the trans community and tweet with hardline political commentators. .
Meanwhile, Tesla shares cratered 65% last year, in part because Musk turned off customers and spread too thin at a time when competition fromheated. Shares of the company recouped some of their year-to-date losses, rising about 33% to $146.10, still well below the company’s record high of $407 adjusted for according to the allocation a little over a year ago.
On Wednesday, the company is due to announce its earnings and sales for the holiday season. Normally, this would be a rote financial release, where analysts and investors would read the data to glean the latest insights from the famed electric car maker. But this time, it may serve as a referendum on the company’s future, and whether it can succeed despite Musk’s shared attention to other projects likemedical and, of course, Twitter.
“A lot of bad news is already priced into Tesla stocks,” Wedbush analyst Daniel Ives wrote in a message to investors earlier this month. “The Cinderella ride is over for Tesla and Musk must now navigate the business through this grim Category 5 macro-storm instead of focusing on his new Twitter golden child which remains a distraction and an overhang for the company. history/Tesla stock in our view.”
Many analysts have used the term “distraction” to describe Musk’s apparent obsession with Twitter. He is being criticized for his time on the struggling social network since taking over as CEO.
“We believe Mr. Musk is increasingly isolated as Twitter’s finance manager with his management of users on the platform,” Oppenheimer analysts wrote in a message to investors last month, when the company has beento downgrade Tesla’s stock from “Outperform” to “Perform”. “We see the potential for a negative feedback loop of advertiser and user departures from Twitter…just as Tesla’s competitive environment intensifies.”
In better times, Musk might have weathered this storm better. After all, he was previously the tech industry’s answer to billionaire comic book industrialist Tony Stark, also known as Iron Man. And like any good modern drama, the main character is far from perfect and his future is equally uncertain.
Analysts on average expect Tesla to post a profit of $1.13 per share on nearly $24 billion in sales, according to surveys published by Yahoo Finance. That would equate to a 32% jump in profits on a 35% increase in sales.
Investors and analysts will also be listening carefully to anything Musk says on a conference call after Wednesday’s earnings release. The company slashed prices for its cars by up to 20% earlier this month, a move analysts saw as taking on competitors, though it also upset current Tesla owners and dealers. , who suddenly had to settle for having paid more or having sold less. their used car.
“Price cuts have a huge impact on [Tesla’s] economy,” Bernstein analyst Toni Sacconaghi said in a note to investors ahead of Tesla’s earnings report.