In just 20 days, Elon Musk he shook the world again with the ‘Operation Twitter‘. Between April 4 and April 25the South African had time to buy almost 10% of the social network, agree to join its board of directors, reject the position, submit an offer for the entire company, which was rejected, and a counteroffer of €43 billion which was accepted, starting a Procurement process expected to be long and complicated. Since April 25, news about Musk and his intentions with Twitter have abounded, but not much has been written about one of the immediate consequences of the operation: in two weeks, Tesla it has lost 218,800 million dollars.
These losses are the consequence of a depreciation of its shares of the 21.15% from April 25. Two weeks ago, Tesla was worth over a billion dollars, now 815.5 billion. These losses have been accentuated by unforeseen situations such as the stoppage of the Shanghai for him Covid-19, but also because of the reaction of investors to the offer on Twitter and to every news that comes out about Musk, its CEO, and the social network. Each publication on the subject is a poison that causes billionaire losses for Tesla -at the time of writing this article his shares fall by 9%- and feeds the speculations about the lack of interest of the South African in the car company, a lack of motivation that could even make him rethink his position in the brand.
Finance the purchase of Twitter with Tesla
According to Elisabet Ruiz-Dotras, professor of Economics and Business Studies at the Open University of Catalonia (UOC), one of the main causes of this bleeding is the uncertainty generated by not knowing where Elon Musk will get the 43,000 million to buy Twitter. “He wants Twitter to be a private company, to stop trading, something for which he would have to buy all his shares & rdquor ;, says Ruiz-Dotras, who adds that” Elon is very rich, but his money is not liquid, but he has it in the form of companies”.
In this sense, the UOC professor acknowledges Tesla Y SpaceX as Musk’s main businesses but assures that aerospace “has a very committed capital and it’s Musk’s lifelong dreama personal battle, put a man in Mars”. Investors are afraid, Elisabet Ruiz-Dotras believes, that “Tesla no longer motivates Elon because he has already achieved most of his goals & rdquor ;.
Ishmael El-Qudsi, CEO of Internet Republic, adds another theory. “As innovative and versatile as Elon is, the problem is adding companies. He has Tesla, neurolink, SpaceX, The Boring Company and sometimes he brings out inventions like the flamethrower which he sold a few years ago. He has four or five multi-million dollar companies and his attention and his time is not unlimited & rdquor ;, says El-Qudsi. “The investor is punishing the purchase not because of what Musk says or does not say, but because his hours as CEO of Tesla they are worth a lot of money”, he adds before assuring that “if instead of Twitter it was another company, they would have punished him the same”. “For better or for worse Tesla is Elon Musk and all this news has overshadowed the brand’s great sales performance, new deals and the good economic results& rdquor ;, finish.
El-Qudsi shares with Ruiz-Dotras the question of whether it is possible that Tesla no longer motivate to the South African tycoon. “Tesla is a mature company with a lot of management and he likes to innovate, not manage. My feeling is that you find that much more boring than sending a man to Mars either Twitter& rdquor ;, exposes. “He likes to overcome challenges And I don’t think he has many left in Tesla because he has even overcome the logistical problem, the biggest challenge in the automotive industry today & rdquor ;.
Could you sell Tesla?
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Yes, really Tesla has stopped motivating Musk, Ruiz-Dotras wonders “Why isn’t Elon Musk going to sell a large part of Tesla?” “He is capable of doing it, as he already left PayPal once created. It doesn’t matter to him. Tesla is a goal accomplished & rdquor ;, he argues. “The market reflects this uncertainty. Not knowing what strategy to follow. If I had to bet I’d say will get the money out of Tesla”.
El-Qudsi does not rule out that part of the money leaves Tesla either, although he does not believe that the company will get rid of it. “He is the richest man in the world but he has no cash and this is a difficult balance to manage & rdquor ;, he admits. “He does not sell much because his assets would collapse. I do not expect him to sell more shares in the short term, he himself has said so & rdquor ;, he adds. What could happen is that “in the medium term stop being the CEO of Tesla and delegate its management to someone from the traditional motor industry because it has almost become one more car manufacturer & rdquor ;. Still, El-Qudsi considers ‘Operation Twitter’ “one more whim of a millionaire” and remember that “the day the purchase of Twitter was announced, Tesla lost twice what the social network is worth”.