December 3, 2022

Musk's all-night Twitter spooks spook Tesla investors

Musk’s all-night Twitter spooks spook Tesla investors

SAN FRANCISCO (Reuters) – In 2018, Elon Musk worked all night and slept at Tesla. (TSLA.O) Plants in California and Nevada where the company struggled to ramp up Model 3 production.

On Monday, Musk said he worked all night at Twitter’s headquarters in San Francisco and would continue to “work and sleep here” until the social media platform — which he recently acquired for $44 billion — is fixed.

Described as a “nano-manager,” Musk’s penchant for working long hours in moments of crisis has been a well-known part of his trademark. But the billionaire’s deep dive into Twitter, after a drawn-out buyout he tried to cancel, has some Tesla investors worried about his ability to focus on his role as CEO of the world’s most important automaker.

“Tesla investors will be disappointed,” said Gene Munster, managing partner at venture capital firm Loup Ventures. “He probably spends more time on Twitter than any Tesla investor would feel comfortable with.”

Musk, who is expected to testify in court on Wednesday about whether Tesla’s $56 billion pay package, did not respond to an email from Reuters seeking comment.

“Tesla has you covered too,” he wrote on Twitter on Monday, saying he plans to work at the electric car maker for part of this week. Tesla has an office in Palo Alto, California, and a factory in Fremont, California.

Tesla shares have fallen 50% since early April, when he revealed he had acquired a stake in Twitter. Sales of Musk’s Tesla stock — totaling $20 billion since he disclosed his stake in Twitter — added to the pressure.

Tesla faces a growing list of challenges from demand concerns in China to a regulatory investigation into claims it makes about its “Autopilot” driver-assist technology capabilities in the United States.

So far this month, Musk’s tweets about his efforts to restart Twitter have accounted for more than two-thirds of his posts on the platform than he did in October, according to a Reuters tally.

Tesla accounted for just 3% of his tweets from November 1 to November 15, down from an average of nearly 16% over the previous eight months.

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Munster said he expects Twitter to capture Musk’s attention over the next six to 12 months, adding that Tesla was a more sophisticated company than it was in earlier days and less immediately dependent on Musk.

In recent days, Musk said his workload had increased dramatically after his Twitter purchase.

“I have a lot of work on my plate,” he said via video link to a business conference in Indonesia on Monday, saying he has been working “from morning till night seven days a week.”

“Once you set Twitter on the right track, I think it’s a lot easier to manage than SpaceX or Tesla,” Musk said earlier this month at Barron’s Investment Conference, referring to the aerospace company he also runs.

Tesla investor Ross Gerber, who is a staunch supporter of Musk, said Tuesday that Tesla needs to find a multitasking vice president for its CEO. “I think he’s finally getting to a point where he’s really challenging himself. I think they need to find the right person. And quite frankly, they don’t have that person.”

“as little time as possible”

Tesla’s board of directors has expressed concerns about Musk’s commitment to SpaceX and several smaller companies. Tesla Chairman Robyn Denholm said in a 2018 email that the “minimum amount of time” Musk spent at Tesla was “becoming more and more problematic,” according to court documents related to his salary trial. A Tesla shareholder says the board failed to approve a $56 billion salary package for him without asking for his full attention.

Another board member, Ira Ehrenpress, noted at trial that Musk was paid for results, not time served, a view Musk echoed in his testimony in 2021. At Tesla’s annual meeting in August, Musk responded to a question about ” Risking the main guy” by acknowledging his colleagues, saying “We have a very talented team here. So I think Tesla will continue to do very well even if it gets abducted by aliens or maybe it goes back to my home planet.”

Musk has proven his doubters wrong before, and some early investors say they expect him to be ready to take on Twitter. “When you get a businessman doing everything he’s done, we should just kiss his feet. The guy is amazing,” billionaire investor Tim Draper told Reuters.

But others have lost their patience.

“Musk has succeeded in doing what bears have tried unsuccessfully for years — crushing Tesla shares,” Wedbush analyst Daniel Ives, a longtime Tesla bull, said in a note last week.

On Twitter, Ives called Musk an “albatross,” a “distraction,” and a “money hole.” “The Twitter circus show is slowly beginning to influence the original Tesla electric vehicle brand,” he said.

Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru Additional reporting by Aditya Soni and Yurvaj Malik in Bengaluru Editing by Kevin Krulicki, Ben Clayman, Peter Henderson and Matthew Lewis

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