“Musk risk” has been weighing on Tesla’s stock for some time, said Esha Dey on Bloomberg. But it reached “another level” last week when shares in the electric carmaker sank by 16%.
The performance over the quarter to date is even worse: the stock has “tanked” by 43%, taking its market value below $500bn for the first time in two years. No wonder Elon Musk has relinquished his title as the world’s richest man. The “Chief Twit” has now raised eyebrows by selling another $3.6bn of his Tesla stock – “possibly to help refinance debt” from his $44bn purchase of Twitter. The move brings his total Tesla disposals this year to $40bn.
The carmaker’s investors are “starting to wonder” if the Twitter-distracted Musk is still “the right man to lead the company”, said Steve Mollman in Fortune. “Tesla has no working CEO,” observed the Indonesian billionaire Leo Koguan, who has called for Musk’s “ouster”.
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It isn’t just Twitter that worries Tesla investors, said Bloomberg. The darkening global outlook is also weighing heavily on their minds. The Morgan Stanley analyst Adam Jonas warns that the brakes are “screeching” on demand for electric vehicles, as rising prices take affordability to the breaking point. “Once valued like a pipe-dream”, Tesla is beginning to resemble any other car company, said Jonathan Guilford on Reuters Breakingviews.
Confidence isn’t helped by the ongoing mess at Twitter. As well as selling Tesla stock, Musk is also seeking to sell Twitter shares to existing investors (at the $54.20 buyout price) to shore up the tottering social media platform, and meet a rising annual interest bill of $1bn, said the FT. Rock-bottom interest rates helped create Elon Musk’s empire. “Could the 2022 reversal in monetary policy bring it all crashing down?”
