Elon Musk’s advocacy of unfettered rhetoric on Twitter and his cannibalization of content moderation on the social networking site have caused consumers to grow fonder of Musk. Tesla (TSLA) Brand. Analysts say this has caused Tesla shares to lose ground.
Tesla stock is down 15% since Musk, the electric car maker’s CEO, completed his acquisition of Twitter on Oct. 28.
Controversial moves include Musk reinstating several right-wing agitators who were previously banned from Twitter. Among them is former President Donald Trump. There has also been a sharp rise in racist and anti-Semitic comments on Twitter, further staining the Tesla stock story, according to various reports.
Morgan Stanley analyst Adam Jonas weighed in this week. He said Musk’s malicious comments had magnified negative sentiment about Tesla and could do some damage to the electric car maker’s fundamentals.
“Our investor survey reinforces our views that Elon Musk’s recent engagement with Twitter has contributed to the negative sentiment momentum in Tesla shares and could lead to a degree of negative downside bias for Tesla’s fundamentals,” Jonas said in a note to clients.
The massive drop in Twitter revenue
It was already bad enough for Musk to almost halve it Twitter’s biggest advertisers have survived To avoid having ads next to controversial articles. Early this month, Musk sent out a tweet saying that Twitter had seen a “massive drop in revenue.”
apple (AAPL), for example, has “mostly stopped” advertising on Twitter, according to Musk. He then issued a series of negative comments, attacking Apple and CEO Tim Cook.
Dan Ives, an analyst at Wedbush, said in a report to clients last week that the “Twitter circus show” is a drag on Tesla stock and is not abating.
Ives writes that Twitter’s burden consists of three main factors. One of them is the fear that Musk will sell more Tesla shares to fund red ink on Twitter. There is also a deterioration in the Tesla brand, and Musk’s attention has focused on Twitter rather than Tesla.
“In what was a dark comedy show with Twitter, Musk basically distorted the Tesla story/stock and started potentially impacting the Tesla brand with the ongoing Twitter train wreck debacle,” Ives said.
Advertisers have stopped placing ads on Twitter since Musk completed his announcement The acquisition of 44 billion dollars The company, on the basis of debt of $ 13 billion to complete the transaction.
Tesla Stock: The Highest-Paying Acquisition
Ives said Twitter’s $44 billion price tag “will go down as one of the highest-paid technology acquisitions in the history of Street Mergers and Acquisitions.”
In the first week of the deal closing, Musk cut Twitter’s workforce in half. This included teams responsible for content moderation. This was followed by the exodus of several high-ranking executives.
Another of Musk’s actions that has advertisers concerned was his reinstatement of Trump. Additionally, Twitter will no longer enforce its policy against misinformation related to the coronavirus The Washington Post reported.
Tesla stock is down 46% since Musk first disclosed a 9% stake in Twitter in early April.
Please follow Brian Deagon on Twitter at @employee Learn more about technical stocks, analysis and financial markets.
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