Wall Street cheered the latest data on inflation.
Big tech stocks, including Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), Google owner Alphabet (GOOGL) and Facebook parent Meta Platforms (META) enjoyed particularly notable gains. But one leader of the Nasdaq was absent from the market party: Elon Musk’s Tesla.
Shares of Tesla (TSLA) fell more than 2% Tuesday, hitting a new 52-week low in the process.
Tesla’s stock has now plunged more than 50% this year. Is the fact that Musk seems to be spending a lot of time focusing on Twitter, his new $44 billion social media toy, a problem?
“Clearly, [Tesla’s] share price performance has been hurt by the incessant noise surrounding Twitter since Elon Musk completed his acquisition in late October,” said CFRA Research analyst Garrett Nelson in a recent report.
Nelson nonetheless has a “strong buy” on Tesla, noting in particular that he thinks worries that Musk will have to sell more Tesla shares to help Twitter are overblown.
But Dan Ives of Wedbush, who has been critical of Musk since the Twitter deal closed, is still expressing concerns. He said in a report in late November that “the Twitter circus show continues to go on with Musk laser focused on turning around this troubled platform while creating controversy on a daily basis.”
Ives added that “the PR Twilight Zone of Twitter happens for the world to see and advertisers remain at bay while the Musk wild card of content moderation is front and center.” Musk’s penchant for controversial (and potentially alienating) tweets aren’t helping.
That’s not good news for Twitter or Tesla. Ives said there are legitimate worries about “brand deterioration of Musk associated with Tesla.”
It’s too soon to know if consumers will start to shun Tesla’s cars because they don’t like what the CEO says on Twitter.
But Ives thinks investors are obviously worried. “At the end of the day, Musk is Tesla and Tesla is Musk,” he said.
