In the middle of an audio chat in part discussing the future of Twitter, CEO Elon Musk said he had to drop off.
“I have a Tesla meeting that I’m late for,” he said on the Twitter Spaces chat late Tuesday, which more than 300,000 people tuned into.
His abrupt departure is illustrative of concerns now dogging the new Twitter owner and CEO after his purchase of the company for $44 billion in late October. Helming the social media company has consumed much of Musk’s schedule over the past several weeks; he has appeared on multiple audio chats and tweeted photos working from the company’s San Francisco headquarters.
Now, some Tesla investors are calling for Musk to hand over the reins at one of his companies as the electric vehicle company’s stock plummets — raising concerns the billionaire is stretched too thin. It closed Wednesday at $156.80 per share, with an overall valuation of less than $500 billion, sharply down from when Musk signaled his interest in Twitter over the spring, and Tesla was valued at over $1 trillion.
Contributing to the losses, Musk sold around $3.5 billion worth of Tesla stock in recent days, according to a financial filing Wednesday night. That added to another more than $3.9 billion in Tesla shares sold by Musk in early November, according to the filings.
“Wake up tesla [board] — what is the plan? Who is running tesla and when is Elon coming back?” tweeted Ross Gerber, a Tesla investor who supported Musk’s Twitter bid.
He added in a tweet late Wednesday that Tesla needed to buy back shares “to take advantage [of] the low share price Elon has created,” as investors anticipated a potential further blow to the company’s value on Thursday.
Musk did not respond to a request for comment. Tesla and Twitter did not respond to requests for comment.
Musk tweeted in a reply Tuesday that “I will make sure Tesla shareholders benefit from Twitter long-term.”
Musk’s bid to buy Twitter has been controversial with Tesla investors since he first announced it this spring. The billionaire holds much of his wealth in Tesla shares, and it was immediately apparent he would have to leverage his position there to afford his purchase of the social media company. Tesla’s stock fell, but many investors remained cautiously optimistic, or at least neutral, about Musk’s deal.
Investors cite their belief in Musk, including what they perceive as his relentless work ethic and ability to extract the most out of his employees. Musk has touted sleeping on the floor of the Tesla factory during a critical period when the company was struggling with production.
Musk also brought that ethos to Twitter. Early on into his tenure, a photo showed an employee using a sleeping bag on the office floor, along with a tweet using the hashtag “#SleepWhereYouWork.” Musk demanded that employees commit to an “extremely hardcore” Twitter or accept severance packages, effectively laying off those who did not agree to the new ethos.
In his brief time as owner and chief executive of the company, Musk has gutted Twitter’s workforce, disbanded an outside trust and safety council designed to help keep the site safe for users, and welcomed previously banned accounts, including that of former president Donald Trump, back onto the site.
Since he took over in October, Musk has faced questions about how long Twitter will continue to impose such heavy demands on his time. He has said he will eventually reduce his time at Twitter and find someone else to run it.
Tesla has acknowledged in financial filings that Musk is occupied with his various business ventures, citing it as a risk to the business.
“We are highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer,” the company has said. “Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla.”
Already for some Tesla investors, it’s adding up to be too much Twitter and not enough focus on Austin-based Tesla.
“We’re in literally the best part of the company’s history and it’s being totally demolished by Twitter,” Gerber said in an interview. “I think the stock would rally big-time if they just said ‘Elon’s not CEO of Tesla anymore.’ Now I don’t want that. What I want is him back in Austin.'”
If the BOD of tesla made an announcement on what’s happening with tesla leadership. Someone should be interm CEO. The stock decline would end. It’s that simple. @MartinViecha $tsla
— Ross Gerber (@GerberKawasaki) December 13, 2022
Gary Black, managing partner of Tesla investor Future Fund LLC, called on the Tesla board to pressure Musk to find a leader for Twitter, so he can refocus his energies on the electric vehicle company.
“He will realize soon (if not already) that his polarizing political views are hurting customer perceptions of [Tesla] EVs,” he wrote in a tweet. “Customers don’t want their cars to be controversial. They want to be proud as hell to drive them — not embarrassed.” He expressed hope Musk could “focus on [Tesla] as CEO.”
Tesla is facing a demand slowdown in China and rising costs of supplies to make the electric vehicles. Investors are concerned about Musk’s split focus, said Wedbush Securities analyst Dan Ives. They had also been wary he might continue to sell Tesla stock to fund Twitter.
Not since Steve Jobs with Apple or Jack Welch with GE has there been a CEO whose name is so closely tied to his company’s brand, Ives said.
“The brand of Musk is so associated with Tesla,” he said. “And the Twitter circus show has been a black eye for Musk and therefore a black eye for Tesla.”
Goldman Sachs lowered its price target for Tesla this week, often meaning analysts expect the stock to fall, even as it said the company “remains well positioned for long-term growth.” But deliveries are likely going to be lower than expected, analysts wrote. They called attention to media reports that Musk’s actions have made the Tesla brand more polarizing.
“We believe that Tesla’s brand has significant value related to the company’s leadership position in clean energy and advanced technology,” Goldman Sachs analysts wrote. “Having consumer focus related to Tesla shift back to these core attributes of sustainability and technology will be important in our view if Tesla is to meet or exceed long-term investor expectations for Tesla.”
Twitter’s and Tesla’s futures are now tied to each other — not just through Musk’s leadership, but also through his wealth.
“The more Tesla stock goes down, it ultimately puts more pressure on the ability to fund further Twitter losses,” Ives said.
Even some of Musk’s fans seem to be questioning him.
Galileo Russell, a YouTuber who focuses on Tesla and has heaped praise on Musk, criticized Musk for wading into politics.
“i think @elonmusk getting too political is a mistake,” he wrote in a tweet.
Musk replied: “Must be done for the future of civilization, without which nothing matters.” Another account then asked Musk where that ranked on his list of priorities.
“Number 1,” he wrote.
Fans piled on, writing in tweets: “Can we make Tesla #1 and woke mind virus #2?” and “Hope it’s worth it.”
Tesla investor Russell said he’s standing by Musk, despite his tweet on Musk’s turn toward politics.
“I hold all my Tesla shares, and continue to believe Elon is the best CEO on the planet, and best person to run Tesla,” he told The Washington Post. “Short term shareholders are a loud minority and will be washed out. This is a healthy and normal process as financial markets across the world rationalize.”
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