- Tesla investors think Elon Musk’s Twitter controversies are hurting the automaker’s value.
- Musk has bristled at criticisms that running Twitter keeps him from focusing on Tesla.
- Tesla shares dropped 65% in 2022, and are still sliding.
As Elon Musk bounces from controversy to controversy at Twitter, some Tesla investors are hoping the electric car company will start acting like a more mature company.
Once mired in the “production hell” that kept it scrambling to meet rampant demand, the EV pioneer is now navigating waters more familiar to its established rivals. Tesla recently reported disappointing fourth quarter sales after offering hefty discounts on its most popular vehicles in the US and China, a worrying sign of over-building.
While Tesla deals with these time-worn industry problems, Musk has courted controversy at Twitter, and Tesla investors are tiring of the potential effect on Tesla’s value.
“The Cinderella ride is over for Tesla,” Wedbush analyst Dan Ives wrote in a recent note. “Musk now needs to navigate the company through this Category 5 dark macro storm instead of focusing on his new golden child Twitter, which remains a distraction and overhang for the Tesla story/stock in our opinion.”
Musk has said he’s not missing any important Tesla meetings or ignoring important business decisions since taking over at Twitter, and that he “literally can’t think of anything” he could have done to help Tesla’s execution in the last two months of 2022.
Shares of Tesla dropped 65% last year, and continue to slide
But investors have reason to worry. Shares of Tesla dropped 65% in 2022, with much of that slide happening after Musk took over Twitter in October. After reaching a historic $1 trillion market cap in October 2021, the electric car company’s market value now sits around $349 billion.
Meanwhile, Tesla on Friday again slashed prices on the Model 3 and Model Y in China, the world’s largest auto market. In the US, Tesla is fresh off an end-of-year cash-back deal for the same popular models, which offered an unprecedented $7,500 discount. Investors have said they expect more price cuts in response to softer demand this year.
Musk has also spent much of the year selling off shares of Tesla, in part to help to fund his $44 billion purchase of Twitter. Musk promised to stop selling Tesla shares for “probably two years” in a Twitter Spaces conversation with investors at the end of last year.
In the same Spaces conversation, one participant raised concerns about Musk’s controversial political views and decisions to allow some previously banned far-right voices back onto Twitter is hurting Tesla’s brand.
Musk bristled, responding: “I’m not going to suppress my views just to boost the stock price.”