Musk sells $3.6b more of Tesla stock
If Tesla shareholders were already worried that Elon Musk was too distracted by his new chief executive position at Twitter, they now have more reason to be upset: Musk disclosed Wednesday that he had sold another $3.6 billion worth of Tesla stock, possibly to prop up his embattled social network.
Musk has now sold $23 billion worth of Tesla stock this year, much of it after he pledged in April to stop selling shares to finance his Twitter deal.
He hinted at what he was up to Tuesday, saying on Twitter, “Beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates.” That suggests he either plans to buy back some of Twitter’s billions in debt — including the $13 billion it took on as part of his takeover — or, perhaps less likely, buy back some of the company’s shares.
None of this will reassure Tesla shareholders, who are fretting over the roughly 61 percent drop in the carmaker’s stock price from its peak in late 2021 — and a chief executive who has admitted to spending nearly all of his time at Twitter nowadays. On Wednesday, Leo KoGuan, one of Tesla’s biggest individual investors, said on Twitter, “Tesla needs and deserves to have working full-time CEO.”
The slump in Tesla’s stock is a sharp break from the days when its ascent lit up the stock market and gave the company a market value of well over $1 trillion. This year, the stock has not only lagged the wider market but also more established automakers that are competing more aggressively with Tesla in the fast-growing electric vehicle business. Some investors and analysts are concerned that the competitive challenges Tesla faces are coming at a time when Musk appears to not only be distracted but also possibly selling Tesla shares to shore up his purchase of Twitter.
Tesla stock was little changed Thursday after falling for three straight days.
“The Twitter nightmare continues as Musk uses Tesla as his own ATM machine to keep funding the red ink at Twitter,” Dan Ives, a stock analyst at Wedbush, wrote in a note to clients Thursday. Some investors are also worried that Musk’s divisive and incendiary statements on Twitter could be damaging Tesla’s brand and putting off customers, especially people who are buying electric cars to reduce the emissions responsible for climate change.
Some corporate boards will intervene if a chief executive appears to be distracted or overly focused on other ventures, but Tesla’s directors, some of them longtime friends of Musk, have been widely criticized by corporate governance experts for doing little to admonish or restrain him.
At the same time, Musk has been busy suspending accounts at Twitter. Most notable among them was @ElonJet, the brainchild of Jack Sweeney, a 20year-old college student who drew on public data to track Musk’s private jet.
The move signifies a shift in Musk’s approach to Sweeney, after the billionaire — a selfproclaimed free-speech absolutist — initially pledged not to suspend the @ElonJets account. Twitter justified suspending the accounts based on a change in its rules that appears to have been put in place in the last 24 hours.
A new poll suggests some chief executives remain wary of what Musk is doing at Twitter. At the invitation-only Yale CEO Summit held this week, attendees were asked to weigh in on top business topics.
Fifty-six percent of respondents said companies should stop advertising on Twitter (though a majority later said their companies had not).
Sixty-nine percent said they believed Twitter’s best days were behind it, while 79 percent said Musk had become a detriment to the value of his companies.