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HomeMarketTwitter Users Say Musk Should Step Down as CEO. Tesla Investors Watch...

Twitter Users Say Musk Should Step Down as CEO. Tesla Investors Watch Closely.

Elon Musk put his leadership of Twitter up to a user poll on Sunday.

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Constanza Hevia/AFP/Getty Images

The ayes have it.

Tesla
(ticker: TSLA) investors want the Twitter overhang plaguing the stock to abate. They might get what they’re wishing for.

Tesla
CEO Elon Musk ran a poll on Sunday evening asking if he should step down as head of Twitter, adding, “I will abide by the results of this poll.”

The poll closed early Monday after more that 17.5 million votes were cash. “Yes” beat “No” 57.5% to 42.5%.

Shares of Tesla (ticker: TSLA) have turned lower in midday trading, falling 1.7% to $147.61, giving up an earlier gain. The S&P 500 is down about 0.5% and the
Dow Jones Industrial Average
is flat.

Besides the poll, investors were weighing a downgrade to Hold from Buy by Oppenheimer analyst Colin Rusch.

Musk has more than 120 million followers on Twitter. Tesla investors were the ones likely voting “Yes.” Tesla stock has been hammered since Musk took over, falling about 33%. The
Nasdaq Composite
has declined about 1% over the same span.

The poll is “a positive surprise for sure,”
Future Fund Active ETF
(FFND) cofounder Gary Black told Barron’s.

Twitter has posed a few problems for Tesla stock since Musk took over in late October. Musk has been selling his shares, without much warning, apparently to cover mounting losses at his social media platform. What’s more, several Wall Street analysts, including Goldman Sachs’ Mark Delaney, Pierre Ferragu from New Street Research and Wedbush’s Dan Ives, have written about how Musk’s management of Twitter was impacting Tesla’s brand image.

Management distraction has been another concern. “Attention focused on Twitter instead of [Tesla] has been another big issue for investors and likely is behind this poll results with many Musk loyalists wanting him to leave as CEO of Twitter,” wrote Ives in a Monday report. “It appears Musk’s reign as CEO of Twitter will come to end and thus be a major positive for Tesla’s stock.”

Tesla shares are up to start the day. What the reaction to the poll will end up being is hard to say. Tesla stock is roughly $75 below where it was when Musk took over Twitter.

That $75 Twitter-overhang is made up of three parts: management distraction, branding and Musk’s stock sales.

Musk fading into the background at Twitter helps branding and distraction. But Musk’s stock sales, and what role at Twitter he will assume if he’s not the CEO, are still out there to consider.

Coming into Monday trading, Tesla stock has dropped about 57% this year, while the S&P 500 is down about 20%. Aside from Tesla-specific issues, Inflation and interest rates have hit car-related stocks harder than most.
General Motors
(GM) and
Ford Motor
(F) shares have fallen roughly 35%.

Ives, Ferragu and Delaney all rate Tesla stock Buy. About 63% of analysts covering Tesla stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%.

Write to Al Root at allen.root@dowjones.com

Credit: marketwatch.com

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