When Elon Musk parachuted into Twitter’s headquarters at the end of October to salvage his $44 billion acquisition, Tesla investors had little inkling of the damage it would inflict.
However, the billionaire’s polarizing management of his favorite social platform soon sent ripples through the Tesla community, with shares of the carmaker halving in value over just two months.
Even before Musk made “drastic” changes at Twitter, his looming takeover of the company caused a stir among Tesla investors, who were anxious that his position at the social media firm would serve as a huge distraction.
On Wednesday, it emerged there was more bad news for the Tesla bulls who took that stance.
According to comments from Musk himself, he won’t be returning to running the carmaker full-time in the near future as fixing problems at Twitter remains his top priority.
“I need to stabilize the organization and just make sure it’s in a financially healthy place and that the product road map is clearly laid out,” he told the World Government Summit in Dubai.
“I’m guessing probably towards the end of this year should be good timing to find someone else to run the company.”
In December, Musk pledged to cede responsibility for running Twitter to an appointed CEO as soon as he found “someone foolish enough to take the job.”
Given his update on Wednesday, it looks increasingly likely that there won’t be a successor in place until 2024—despite critical issues facing him at Tesla, responsible for the bulk of his $200 billion net worth.
Twitter a ‘lingering concern’ for Tesla investors
“Musk moving the goalposts on naming Twitter CEO to end of 2023 is not what the Street or Wedbush wanted to hear,” Dan Ives, a Tesla bull and analyst at Wedbush, wrote on Twitter on Wednesday.
“The Twitter distraction risk has clearly been toned down over the past few months, but still remains a lingering concern for investors.”
Musk’s investment in Twitter has been viewed by Tesla bulls at best as a costly diversion, as it consumed much of his 120-hour workweek and, by his own admission, even began to affect his health.
At worst they feared it might cause permanent damage to the value of its brand and its stock, as his open partisanship with conservatives began turning away Tesla’s core demographic of progressive car buyers.
The debate around the impact of Musk’s Twitter takeover has divided Tesla followers, with fans of the company like Future Fund portfolio manager Gary Black wanting him to cede the reins at Twitter to an experienced media executive. On the other side were individuals like Tesla influencer Warren Redlich, who remained fiercely loyal to the serial entrepreneur.
Musk’s confirmation that Tesla investors will have to wait for him to step down as Twitter CEO comes at a time when the carmaker’s shares are enjoying a renaissance, however.
Tesla’s stock has doubled in value since hitting a two-year low on Jan. 3, and agitation against the board by well-known investors like Leo Koguan, the third largest individual shareholder, has died down.
Shares are also rallying ahead of the March 1 investor day, where Musk will reveal his Master Plan Part 3 and could present a prototype concept of his $25,000 entry vehicle first flagged back in September 2020.
This helped soften the blow for bulls like Black.
“Elon has toned down the conservative rhetoric,” the Future Fund managing partner said in a tweet on Wednesday, adding that Musk’s pledge not to sell any further Tesla shares this year has also helped investor sentiment. “The noise has largely gone away.”
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