Tesla stock price continues to drop: Are Elon Musk’s Twitter antics to blame?
Since announcing his plans to take over Twitter, the company that employs him as CEO, Tesla has seen its share price drop. Elon Musk’s antics aren’t helping
Tesla investors were always wary of Elon Musk’s adventure with Twitter, fearing that it would be another distraction for the car company’s CEO who also owes SpaceX and a number of smaller companies. Since completing the purchase of the social media platform at the end of October those concerns have only been reinforced by his pulling all-nighters at the San Francisco headquarters of his newest acquisition.
Furthermore, the billionaire’s tweeting activity, which he is an extremely avid user, is beginning to reflect poorly on the pristine electric vehicle maker’s brand. All this has taken a toll on Tesla’s share price but there is more to the story.
Economic conditions for Tesla have been rough
Tesla saw its share price fall by close to a third between Musk announcing that he had taken a stake in the electric vehicle maker and his finally walking into the San Francisco offices after closing the drawn-out deal. Twitter ended up suing the billionaire for trying to back out of the deal accusing him of doing so based on the EV company’s faltering economic situation and thus the source of much of Musk’s wealth. The CEO, who receives his salary in stock options, was required to sell billions of dollars’ worth of stock this year which helped depress its value on top of economic conditions beyond anyone person’s control.
The pandemic-induced bottlenecks in supply chains caused headaches for manufacturers in several industries. The car industry was especially sensitive to the disruption, in June Musk said that two of his gigafactories were “gigantic money furnaces.”
Additionally, the Federal Reserve’s aggressive raising of interest rates has sent the stock markets lower over the course of the year. The tech-heavy Nasdaq, where Tesla is listed, was especially hard hit. But there are potential signs that the EV maker’s CEO has a hand in the company’s more recent woes.
More recent drops in Tesla stock may be directly related to Musk and Twitter
Despite the general woes of the markets, Tesla stock is down nearly 30 percent since its CEO acquired the social media platform. In that same period, other major car manufacturers have seen their stock rise slightly. Perhaps most telling, while markets got off to a positive start this week, the value of Tesla went down.
Over the weekend, Musk sent out a tweet that caused people to accuse him of mocking the LGBTQ community. The billionaire posted “My pronouns are Prosecute/Fauci”. He claims that new details will come to light about the government’s top health official in an upcoming installment of the “Twitter Files.”
In response to the Tesla CEO’s tweet “Boycott Tesla” began to trend on Twitter after Actor Billy Baldwin tweeted “Retweet if you [sic] pronouns are Boycott/Tesla.” Since then its been retweeted 26,000 times with some users saying they had already canceled their Tesla orders.