Things Elon Musk said about taking over Twitter upset not only the managers and employees of the social network; Some of the billionaire’s most loyal supporters who back him as Tesla’s manager have been frustrated with him recently.
The electric car maker has lost about 30 percent of its campaign since April 1, with the drama of ‘do it or not’ related to Musk’s investment in Twitter – until the $ 44 billion deal was signed to acquire the social networking company. The combined Nasdaq index, which has many technology stocks, fell 15% during this period.
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The episode has caused concern even among some of Tesla’s devout fans, who fear he has bitten more than he can swallow. Musk also runs the space industry company SpaceX and helped set up a tunnel mining company and a neuroscience startup working on brain implant technologies. With Twitter, some Tesla supporters fear it could lose focus.
“I would like him to abandon it,” said Gary Black, a managing partner at Future Fund, which owns about $ 50 million in Tesla, according to FactSet. Black, a supporter of Tesla, said he sees Twitter as a distraction that is expected to pump more of Musk’s time than the billionaire thinks to himself.
A close Tesla follower recently tweeted to Musk and the CEO of Twitter: “Elon, Twitter is an unnecessary distraction. Just focus on Tesla. “
“This is not rocket science”
Musk sought to calm such anxieties. “Let’s be clear, I spend less than 5% of my time (really) on buying Twitter. This is not rocket science!” Tweeted last week. “I think of Tesla 24/7.” Tesla did not respond to a request for comment.
Concerns that Musk may have taken on too much are not new, and he managed to make Tesla the most valuable car company in the world while also managing SpaceX.
Tesla investors are digesting Musk’s takeover of Twitter in waves. The company’s stock fell 8%, from April 1 the company’s stock – the last trading day before Musk discovered he had bought a large stake in Twitter – until April 25, when Twitter announced that it agreed to its offer to buy the company. During this time, the combined Nasdaq index fell by about 9%.
Tesla’s decline continued from there. First, Musk sold about $ 9.6 million of Tesla shares, valued at about $ 8.5 billion, in the days after signing the Twitter purchase agreement. Later, when faced with the continuing erosion in Tesla’s share price, he injected new doubts into the Twitter deal, saying the planned acquisition was “temporarily delayed”, noting concerns about counterfeit accounts, although he added at the time that he was still committed to the purchase. Twitter has announced that it is progressing with the acquisition as agreed.
Will finance the purchase of Twitter without Tesla’s capital
Musk, whose fortune consists mostly of Tesla shares, revealed on Wednesday that he no longer plans to rely on a loan backed by Tesla shares to fund the purchase of Twitter. He presented as collateral instead other securities, saying he seeks to find additional external financial support.
The recent decline in Tesla’s share price has caused some people, including Black, to pressure Tesla to buy its shares again. Share buybacks radiate security to investors and support the share price because they reduce the company’s free stock share. Tesla is sitting on about $ 17.5 billion in cash as of the first quarter.
Tesla did not respond to a request for comment on whether the company is considering self-purchases. When the company’s CFO Zachary Kirkhorn was asked in April what the company plans to do with its cash in the long run, he replied that the company is investing in new products and factories.
It was not possible to determine whether the remarks made by some of Tesla’s loyalists affected Musk’s thinking or whether they reflected the views of a larger shareholder public.
Earl Benning, a psychologist from Dayton Ohio and an investor in Tesla, described himself as hesitant about the acquisition of Twitter by Musk.
“Already today he’s a lightning rod, and that will make him even more like that,” said Benning, an avid Tesla supporter with whom Musk routinely corresponds on Twitter. But that did not cause Benning to sell Tesla shares.
“Ayalon will continue to be Ayalon,” Benning said. “I feel that as a long-term shareholder, it will return to where it needs to be because they are showing performance. The company is selling cars and it is profitable.”
Tesla reported a record quarterly profit of $ 3.3 billion in the first quarter of the year.
Corona closures and partisan ideology
Twitter is not the only issue that Twitter investors have had to swallow. Bottlenecks in supply chains and corona closures in China have hurt electric car company sales. In April, Tesla sold only 1,512 cars manufactured at its Shanghai plant, down 94 percent from a year earlier.
Analysts who responded to the FactSet survey expected the company to deliver about 292,000 cars worldwide in the second quarter, down from 310,048 cars it delivered in the first quarter. If they turn out to be right, it will be the first drop in sales from quarter to quarter in more than two years.
Meanwhile, Musk delves deeper into the political tangle, saying he expects attacks against him based on partisan ideology to intensify in the future, and yes, that he intends to vote for Republicans.
“If it does not stop, the brain virus of righteousness [woke] “It will destroy civilization and humanity will never reach Mars,” Musk tweeted last week.
Last week, the Insider website reported that in 2018 SpaceX paid $ 250,000 to an air hostess whose identity was not revealed to silence a complaint on suspicion of inappropriate sexual behavior by Musk, the company’s CEO. Musk responded on Twitter, saying that these accusations Of truth. “
SpaceX President Gwyn Shotwell told company employees in an email later that she personally believes the allegations made against Musk are untrue. Neither she nor Musk addressed the question of whether any amount of silence had indeed been paid. Shotwell wrote in a statement that SpaceX is not willing to tolerate harassment of any kind.
Some Tesla loyalists see the stock price drop as an opportunity. John Stringer, who runs a Tesla owners’ club in Silicon Valley, said he has increased his holdings in Tesla shares in recent weeks.
“It’s basically what’s coming as part of the territory,” Stringer said of Musk’s unexpected tweet and his juggling of running several corporate companies at the same time.