On Tuesday night, Elon Musk participated in a live interview with BBC North America technology reporter James Clayton on Twitter Spaces. The interview was by far the most attended Twitter Spaces with over 3.3 million people participating live and covered a range of topics, including Musk's ownership of Twitter, the changes he has made since buying the site, and the site's financial performance.
And reminiscent of Tesla’s struggles to ramp up Model 3 production in 2017 and 2018, Musk revealed that he has been sleeping on a couch inside a seventh-floor library of Twitter since he bought the company for $44 billion in October 2022. He also praised the changes he has made to the site, including the open-sourcing of its recommendation algorithm, the emphasis on video, and the site's resilience in the face of vast transformation.
Musk said that Twitter is breaking roughly even from a financial standpoint and that advertisers were returning to the site. He also revealed that Twitter has about 1,500 employees now, an 80% decline from around 7,800 workers before his acquisition.
The interview largely focused on Twitter, however, we have also gotten some tidbits concerning Tesla and more specifically concerning Tesla’s stock price. Since Musk announced his intention to buy Twitter on April 14 for $44 billion, up to the end of 2022, Tesla shares went down more than 60%. This means in less than a year, more than $600 billion got wiped off Tesla’s $1 trillion market cap.
Yes, in the meantime all growth stocks have experienced a huge sell-off however, Tesla’s losses have been particularly severe as compared to its peers in the tech and automotive industries.
At that time the sharp fall in Tesla’s stock price was a bit of a head-scratcher for individuals following the company. Especially taking into account the fact that 2022 was particularly a breakout year for Tesla. In 2022, Tesla grew production and revenue at a higher magnitude than ever before. The EV maker’s profit margins also grew to be the highest in the automotive world cementing Tesla’s place ahead of all its competitors.
However, today, in a Twitter Spaces interview with the BBC, Musk ended the mystery of the mismatch between Tesla’s performance as a company and Tesla’s stock performance in 2022. During the interview, Musk took responsibility for causing the over 60% decline in Tesla's stock price last year.
In response to Clyton’s questions suggesting that given the fact that Musk is the richest person in the world, it must not have been difficult for the Tesla CEO to fund his Twitter deal, Musk responded by saying “I sold a lot of $TSLA stock to close this [Twitter] deal. I did not want to sell the Tesla stock; It’s not so easy for me to sell the stock as some might think. I have to sell stock during certain periods, I can’t sell stock during other periods, so there’s only brief windows where I can sell Tesla stock, and this is often taken as some lack of faith in Tesla.”
Musk further added stating “In fact, the Tesla stock sales caused the stock to plummet, which is not good. People couldn’t parse the difference between I’m selling stock because I’ve lost faith in Tesla, which I haven’t, or that it’s desperately needed for Twitter.”
This is the first time that Musk has directly taken accountability for crashing Tesla’s stock price last year. However, Musk doesn’t appear as though he will be forced to sell more Tesla shares to fund Twitter as the social media platform appears to be getting back to financial health.
Currently, Twitter’s continued health should remove any Elon Musk-caused uncertainty from Tesla shares. However, we will be sure to keep you posted if the situation changes. Until then, make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
Image: Courtesy of Tesla
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Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.