London Daily

Focus on the big picture.
Saturday, Feb 22, 2025

Elon Musk promised Tesla would benefit from his Twitter misadventure. But Wall Street is worried he's using Tesla as his 'personal ATM' to fund his wild plans for Twitter.

Elon Musk promised Tesla would benefit from his Twitter misadventure. But Wall Street is worried he's using Tesla as his 'personal ATM' to fund his wild plans for Twitter.

Elon Musk continues to sell Tesla stock to cover his Twitter project, totaling over $20 billion. Investors are worried about Tesla's future.

The impact of Elon Musk buying Twitter on Tesla is getting scarier for investors. For the third time, after saying in April that he had "no further TSLA sales planned," filings made on Wednesday revealed Musk sold 22 million more shares of Tesla, valued some $3.6 billion. That brings the total amount of Tesla stock that Musk has sold this year to $23 billion.

Just a few days ago, Musk promised that in the long haul, Tesla would benefit from his ownership of Twitter. But there's growing skepticism from analysts that will happen. Dan Ives at Wedbush wrote in a report on Thursday that Twitter remains a nightmare for investors because Musk has been using "Tesla as his own ATM machine to keep funding" the social network. 

Tesla's falling electric vehicle sales as countries around the world face their own recessions amid the ongoing fall out of the pandemic isn't necessarily a shock. But it does present a problem for Tesla and its owner, who continues to use its shares to fund his refashioning of Twitter for his ventures to build out 'the everything app' that he refers to under the name "X."

Ultimately, Elon promised Tesla shareholders they'd benefit from Twitter. He also promised he wouldn't sell any more Tesla stock. It's up to Tesla investors to decide whether he plans to keep his promise.



"Elon is Tesla's brand. He needs to pull it together," Loup Ventures' Gene Munster told Insider earlier this week. Some, like major Tesla shareholder KoGuan Leo, have gone so far as to suggest that Musk has "abandoned" his duties at the carmaker, and called for a new CEO to replace him.

Meanwhile, Insider has reported on a slate of problems for Twitter that include: advertisers that have suspended their activity on the platform; the failure of Elon's reimagined Twitter Blue; growing concern around the rise of bigotry on the platform; and Elon's troubling political tweets that seem to be adding to the non-stop swirl of controversy around the company. 

In his note to clients, Ives maintained an outperform rating for Tesla, indicating that he expects Tesla's rate of return to do better than its peers despite signs that it won't be the best performer in the batch.

Munster, for his part, further admonished that Elon would cause long-term damage if he does nothing about the number of issues arising from the billionaire's purchase of Twitter. 

The broader market is also worried. Tesla's stock has dropped 31% since Musk bought Twitter at the end of October. When you track how the stock has held up since Musk's offer to buy Twitter in mid-April, it's down 52%. It should be noted that tech stocks lost trillions of dollars in value this year due to a drop in consumer demand, inflation, and the overall market correction from the astronomical multiples seen the year before.

Tesla faces other issues besides Musk's Twitter problems. The company is no longer the main electric car maker on the block in multiple countries. Since new entrants have carved out their own market share and traditional automakers have successfully launched a series of hybrids and their own EV models, Tesla has seen a rise in competition in the US, China, and parts of Europe. 

It was only earlier this month that Bloomberg reported that Tesla was slashing some of its production output in China by 20% to 30%, a sign that the reality of sales didn't live up to what they were projected to be. It's been also reported that the EV maker lowered the cost of its cars in China in an attempt to boost sales. It worked, but Tesla ultimately lost out to its Chinese competition, BYD.

"More activism and growing investor frustration will force the Board of Tesla to confront some of these issues head on in the near-term. This is a moment of truth for Musk and Tesla," wrote Ives.
Newsletter

Related Articles

0:00
0:00
Close
Good News: Senate Confirms Kash Patel as FBI Director
Officials from the U.S. and Hungary Engage in Talks on Economic Collaboration and Sanctions Strategy
James Bond Franchise Transitions to Amazon MGM Studios
Technology Giants Ramp Up Lobbying Initiatives Against Strict EU Regulations
Alibaba Exceeds Quarterly Projections Fueled by Growth in Cloud and AI
Tequila Sector Faces Surplus Crisis as Agave Prices Dive Sharply
Residents of Flintshire Mobile Home Park Grapple with Maintenance Issues and Uncertain Future
Ronan Keating Criticizes Irish Justice System Following Fatal Crash Involving His Brother
Gordon Ramsay's Lucky Cat Restaurant Faces Unprecedented Theft
Israeli Family Mourns Loss of Peace Advocate Oded Lifschitz as Body Returned from Gaza
Former UK Defense Chief Calls for Enhanced European Support for Ukraine
Pope Francis Admitted to Hospital in Rome Amid Rising Succession Speculation
Senate Republican Leader Mitch McConnell, at the age of 83, Declares His Retirement.
Whistleblower Reveals Whitehall’s Focus on Kabul Animal Airlift Amid Crisis
Politicians Who Deliberately Lie Could Face Removal from Office in Wales
Scottish Labour Faces Challenges Ahead of 2026 Holyrood Elections
Leftwing Activists Less Likely to Work with Political Rivals, Study Finds
Boris Johnson to Host 'An Evening with Boris Johnson' at Edinburgh's Usher Hall
Planned Change in British Citizenship Rules Faces First Legal Challenge
Northumberland Postal Worker Sentenced for Sexual Assaults During Deliveries
British Journalist Missing in Brazil for 11 Days
Tesco Fixes Website Glitch That Disrupted Online Grocery Orders
Amnesty International Critiques UK's Predictive Policing Practices
Burglar Jailed After Falling into Home-Made Trap in Blyth
Sellafield Nuclear Site Exits Special Measures for Physical Security Amid Ongoing Cybersecurity Concerns
Avian Influenza Impact on Seals in Norfolk: Four Deaths Confirmed
First Arrest Under Scotland's Abortion Clinic Buffer Zone Law Amidst International Controversy
Meghan Markle Rebrands Lifestyle Venture as 'As Ever' Ahead of Netflix Series Launch
Inter-Island Ferry Services Between Guernsey and Jersey Set to Expand
Significant Proportion of Cancer Patients in England and Wales Not Receiving Recommended Treatments
Final Consultation Launched for Vyrnwy Frankton Power Line Project
Drug Misuse Deaths in Scotland Rise by 12% in 2023
Failed £100 Million Cocaine Smuggling Operation in the Scottish Highlands
Central Cee Equals MOBO Awards Record; Bashy and Ayra Starr Among Top Honorees
EastEnders: Four Decades of Challenging Social Norms
Jonathan Bailey Channels 'Succession' in Bold Richard II Performance
Northern Ireland's First Astronaut Engages in Rigorous Spacewalk Training
Former Postman Sentenced for Series of Sexual Offences in Northumberland
Record Surge in Anti-Muslim Hate Crimes Across the UK in 2024
Omagh Bombing Inquiry Concludes Commemorative Hearings with Survivor Testimonies
UK Government Introduces 'Ronan's Law' to Combat Online Knife Sales to Minors
Metal Detectorists Unearth 15th-Century Coin Hoard in Scottish Borders
Woman Charged in 1978 Death of Five-Year-Old Girl in South London
Expanding Sinkhole in Godstone, Surrey, Forces Evacuations and Road Closures
Bangor University Announces Plans to Cut 200 Jobs Amid £15 Million Savings Target
British Journalist Charlotte Peet Reported Missing in Brazil
UK Inflation Rises to 3% in January Amid Higher Food Prices and School Fees
Starmer Defends Zelensky Amidst Trump's 'Dictator' Allegation
Zelensky Calls on World Leaders to Back Peace Efforts in Light of Strains with Trump
UK Prime minister, Mr. Keir Starmer, has stated that any peace agreement aimed at ending the conflict in Ukraine "MUST" include a US security guarantee to deter Russian aggression
×