Elon Musk’s move to buy Twitter for 44 44 billion has raised concerns about the depth of executive talent of his more valuable company, electric car maker Tesla Inc., if his attention is further diverted by social media platforms.
Announcing the deal Monday, Musk called Twitter the world’s “digital town square” and spoke of defending freedom of speech, but he also revived fears that a man who once confessed to sleeping on the factory floor during the launch of the Model 3 sedan and last year. There’s just so much extra energy to talk about working crazy hours.
“Despite Tesla being a trillion-dollar company, it feels like a startup,” said Ross Garber, chief Tesla investor at Garbar Kawasaki. “It’s bigger or bigger than the largest company in the world, but it doesn’t have the management infrastructure like other companies.”
After all, Tesla is racing to increase production between supply-chain snarls and higher raw material costs at new plants in Texas and Berlin, as well as sue at the track during the spike of COVID-19 at its largest factory in Shanghai. Musk said in January that Tesla had a lot more on the plate and would not bring new models like Cybertrack this year.
Tesla has been able to overcome its problems, but a heavy pull of its focus by Twitter worries investors.
“I’m afraid this is going to be a confusion,” said Tesler, a senior fund manager who spoke on condition of anonymity. “He’s working on the business expansion of the supply chain and factory delays and energy savings, and it doesn’t fit in at all.”
Shares of Tesla skidded more than 10% on Tuesday, a day after Musk struck a deal to buy Twitter.
WadeBush Securities analyst Dan Ives said:
Shares of Tesla have fallen nearly 18% since its first public release of more than 9% on Twitter on April 4.
Tesla could not be reached for comment, but a company insider who spoke on condition of anonymity said investor concerns were “excessive” and that Mask was still heavily involved in the automaker.
Mask led rocket company SpaceX, as well as brain-chip startup Neurallink and tunneling enterprise Boring Company.
Tesla has previously seen executive turnover in 2019 with the departure of co-founder JB Strobel and last year President Jerome Guillen.
Founded in 2003, Tesla has become the most valuable automaker, but its leadership team on the company’s website has only two executives listed with a mask, including 17 at General Motors and 11 at Volkswagen.
Outside of Musk, Tesla’s current high-profile leadership includes Chief Financial Officer Zachary Kirkhorn and Senior Vice President Andrew Baglino, who manages Powertrain Development. Both are known to investors from their presence at Tesla’s quarterly earnings conference call.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, the account on which he owns a limited number of Tesla shares, wondered if Musk would install someone else to lead Twitter.
“It simply came to our notice then. “Looks like his hands are full with Tesla and SpaceX.”
Garber said that perhaps Musk needs a strong No. 2 executive as he is with President Nguyen Shotwell on SpaceX.
Ian Beavis, chief strategy officer at auto consultancy AMCI, fears that Musk’s Twitter acquisition could even hurt the Tesla brand with controversy over political and social issues.
Some investors are worried about the mask plan, valued at $ 268 billion, according to Forbes, to finance the Twitter deal. Twitter says Musk has secured $ 25.5 billion in debt and margin debt financing and is pledging $ 21 billion in equity. It is unclear whether Musk will sell Tesla shares to help finance the deal.
Musk has 172.6 million shares, according to the Tesla filing, and he has already borrowed about half of his stock. According to Reuters, he would have about 30 million unpaid shares left if he kept more shares as collateral to secure a .5 12.5 billion margin loan.