Elon Musk highlights macroeconomic factors for Tesla shares decline

Jason Robinson on December 21, 2022

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Elon Musk: On Tuesday, shares of Tesla, the top producer of electric vehicles, fell 8% and hit a new 52-week low.

Elon Musk, the CEO, attributed the decline to macroeconomic factors.

The news

Tuesday’s market performance was mixed as Tesla shares slid to a 52-week low and finished at approximately $138 per share, down 8%.

Elon Musk tried to attribute the problem to macroeconomic factors.

Ross Gerber, a longtime backer of Tesla, tweeted:

“Tesla stock price now reflects the value of having no CEO. Great job tesla BOD – time for a shake up. $tsla.”

Gerber launched an unofficial campaign to convince Tesla’s stockholders to ratify his appointment to the board of directors.

“As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed,” Musk replied.

“People will increasingly move their money out of stocks into cash, thus causing stocks to drop.”

Stock

Since Musk said earlier this year that he would buy Twitter, Tesla’s stock has fallen more than those of other well-known manufacturers.

Tesla shares have dropped 59% since April compared to 26% and 12% for Ford and GM, respectively.

The S&P 500 is down 14% as well.

Distractions

Elon Musk, according to Ross Gerber, has been preoccupied.

He mentioned the issues that the new CEO and owner of Twitter had been causing with his social media site.

Late in October, Musk used a leveraged buyout to acquire Twitter.

As CEO of SpaceX, a large defense contractor, he also spends his time between those roles.

Twitter acquisition

Elon Musk sold his Tesla stock, including one, for $3.6 billion earlier in December to obtain money to buy Twitter.

In an effort to “save” the company last month, he laid off more than half the workers after selling his Tesla for billions of shares.

Then he made a number of modifications to the products and the policies, which he ultimately undid.

After layoffs, Musk called an all-hands meeting to motivate the remaining Twitter employees.

He sold Tesla stock, estimated to be worth $3.95 billion, at the start of November.

Musk also sold 19.5 million more Tesla shares, according to a filing sent to the Securities and Exchange Commission.

In April, Musk sold Tesla shares worth over $8 billion, and in August, he sold stock worth over $7 billion.

The CEO of Tesla extended an invitation to employees from previous companies he co-founded to join the Twitter team, as well as to supporters, friends, and autopilot engineers.

Tesla’s challenges

Since late October, Elon Musk has been focusing on his “Chief Twit” position.

Tesla has been offering discounts and incentives to sell automobiles in China, where the company has a sizable production site in Shanghai.

Additionally, the company has pushed to improve productivity in recently built facilities in Brandenburg, Germany, and Austin, Texas.

Additionally, despite Europe’s growing energy prices, Tesla continues to experience supply chain problems in the automotive industry.

The scenario in Europe may reduce drivers’ interest in electric automobiles.

Price targets

Due to the issues the company is now having, Mizuho Securities and Evercore ISI decreased their projections for the price of Tesla on Tuesday.

Analysts at Mizuho Securities warned of “potential weakness in Tesla sales as macro headwinds and a weaker consumer could drive lower demand for higher-priced EVs.”

The company, however, is upbeat about Tesla’s future and cites the following factors as potential boosters of rising domestic demand:

New Tesla factories could provide a competitive advantage
New electric vehicle tax credits in the United States

Early in 2023, China’s EV credits start to run out.

As a result, the group has a buy rating and a $285 price objective on Tesla’s shares.

Tesla shares

Joshua White, an assistant professor at Vanderbilt University and a former economist for the US Securities and Exchange Commission, said:

“Only some of the drop in Tesla’s value can be blamed on interest rates. Twitter overhanging is one important component. China is another huge component.”

“We still don’t know if China will be open all the way, and we see there is supply and demand pressure here in light of the increase in Covid cases and disruption.”

White asserts that Elon Musk likely lost shareholders’ confidence in April when he said he didn’t sell any extra Tesla shares.

Musk persisted nonetheless, raising billions of dollars by selling more shares.

“He seems to sell equity in really large blocks, say ‘I’m done and I’m not selling anymore.’ But talk is cheap,” continued White.

“He says that and then sells more shares. So the more you say that and investors think he’s probably not done? The less confident they will be that the price is going to bounce back.”

References:

Elon Musk tries to explain why Tesla shares are tanking

Elon Musk tells Twitter staff he sold Tesla stock to save the social network

Elon Musk sells giant chunk of Tesla shares again

Leah Cooper on December 19, 2022

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Elon Musk is highly known for a number of things, but he is best known for his role as CEO of the renowned electric car firm Tesla.

Just recently, Musk sold more than 22 million shares of Musk’s company for a total of about $3.6 billion.

The details were disclosed in a financial document that was made available to the public on Wednesday night.

According to paperwork submitted to the Securities and Exchange Commission, the transactions happened this week between Monday and Wednesday.

Tesla

Before taking over the well-known social media network Twitter, Elon Musk had his hands full with Tesla and SpaceX.

On April 29, he tweeted the following to let his fans know about some changes to the electric vehicle manufacturer’s stock:

“No further TSLA sales planned after today.”

According to VerityData, a company that performs financial analysis, Musk has already sold 94,202,321 shares in 2022.

With a share price of $234.46 on average, pre-tax profits came to about $22.93 billion.

Sales

Ben Silverman, the research director of VerityData, said:

“Musk’s prior sales going back to November 2021 were expertly timed, so Tesla shareholders need to pay attention to Musk’s actions and not his words – or lack thereof when it comes to his recent selling.”

But Elon Musk persevered in trying to sell off some of his Tesla holdings.

After deciding to pay $44 billion for Twitter, the CEO resolved to sell a significant portion of his shares.

Musk bought Twitter in late October.

Wealth

This week, Elon Musk lost his title as the wealthiest person in the world.

The CEO of the luxury goods firm LVMH, Bernard Arnault, has reportedly become the richest person in the world, according to Forbes and Bloomberg.

According to Refinitiv, a source of financial market statistics, he still holds the highest position in Tesla, with a 13.4% holding.

Musk said in November that he had sold 19.5 million Tesla shares for a total of $3.95 billion, only days after taking over Twitter.

The worth of the Tesla CEO has climbed to $174 billion, and Arnault’s wealth has increased to almost $191 billion.

Stock

Despite having a well-known brand in the sector, Tesla’s stock performance in 2022 was among the poorest among the most illustrious automakers and IT companies.

Investors worry that Musk’s acquisition of Twitter has taken up the majority of his time.

On Wednesday, the value of Tesla shares, which are traded on the New York Nasdaq index, closed under $500 billion.

The shares last experienced a similar decline in 2020.

Last year, Tesla’s worth was astoundingly above $1 trillion, but it has subsequently decreased in recent months.

Twitter

Elon Musk completed seizing control of Twitter in October.

His focus and efforts are now solely on the social media platform.

By selling shares of Tesla, Musk was able to raise billions of dollars for the acquisition of Twitter.

The shares decreased as a result of the transactions.

The Twitter agreement was finally finalized after some back and forth between the firm and the CEO of Tesla.

Musk attempted to renege on the agreement during that time before deciding to purchase shares of his own company instead.

Some claim that Tesla’s stock price dropped as a result of the takeover’s distraction.

Investors are also concerned that there may be less demand for the company’s electric automobiles because of the weak economy.

Rising borrowing costs have discouraged customers and other companies from adding more electric vehicles to their lineups.

In addition to the problems already highlighted, Tesla has experienced issues with model autopilot, regulatory inquiries into crashes, and recalls.

Other notes

All of 2022 has seen a decline in Tesla stock.

However, things significantly altered after Elon Musk took over as Twitter’s CEO.

On Wednesday, Tesla stock decreased 2.6% to close at $156.80.

As a result, the company’s market capitalization dropped to $495 billion.

As of Wednesday’s close, Tesla stock has also dropped by 55% year to date.

References:

Elon Musk sells another huge chunk of Tesla shares

Elon Musk sells $3.6 bn of shares in electric car maker Tesla

Twitter Blue is $3 more for iPhone users

Jason Robinson on December 19, 2022

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With an emphasis on the Twitter Blue subscription service, Elon Musk and Twitter have been collaborating to improve the organization’s revenue model.

On Monday, the social media company revealed a new iteration of Twitter Blue.

Last month, Elon Musk halted and postponed the launch, which prompted the upgrade.

Apple service

For web users, Twitter Blue is $8 per month; however, Apple customers are in for a shock since the subscription costs them $11.

There is an additional $3 fee for iOS users who purchase the subscription through the Apple App Store.

The price rise is a result of Elon Musk, the new owner, lately expressing his displeasure with the tech giant’s 30% decline in digital revenue generated by applications.

The cut

Musk began criticizing Apple in November over its decreased Twitter advertising expenditures and its 30% decline in digital sales due to applications.

Tesla’s CEO added that Apple has threatened to remove Twitter from the App Store.

Musk said that he was “going to war” in a later deleted tweet.

Additionally, he suggested he would design his own brand of cellphones from the ground up.

Apple’s reactions

Apple CEO Tim Cook remained silent on Musk’s activities despite numerous provocations.

From a commercial standpoint, Twitter is just another app, and the major tech company doesn’t make much money from its in-app transactions.

Government intervention

Republicans JD Vance, the next senator from Ohio, and Florida Governor Ron DeSantis advised Musk on how to pressure Apple.

DeSantis stated that Congress should investigate Apple’s use of monopoly power if it carried out its threat to fire Twitter.

“You also hear reports Apple is threatening to remove Twitter from the App Store because Elon Musk is actually opening it up for free speech,” said DeSantis.

“And [Musk] is restoring a lot of accounts that were unfairly and illegitimately suspended for putting out accurate information about Covid.”

“If Apple responds to that by nuking them from the app store, I think that would be a huge, huge mistake, and it would be a really raw exercise of monopolistic power.”

On the other hand, JD Vance expressed similar views and said:

“This would be the most raw exercise of monopoly power in a century, and no civilized country should allow it.”

Previous pullouts

The digital behemoths will likely delist Twitter’s app from the App Store if Apple stops collecting platform fees.

Fortnite launched a feature to the iPhone app in 2020 that allowed players to purchase in-game cash from Epic Games directly, lessening Apple’s typical 30% cut of purchases.

Apple took Fortnite off the App Store the same day.

Later, Apple prevailed in a court battle with the other party.

An appeal, however, is still ongoing.

Musk wants to generate more revenue through Twitter subscriptions rather than through adverts.

Twitter is cutting costs while carrying a sizable debt, which reduces Apple’s advertising, a significant challenge.

The subscription

Twitter announced on Saturday that users with verified phone numbers would see a blue checkmark when an account is reviewed and approved.

Subscribers to the Blue service will have access to exclusive features and services, such as tweet editing.

Twitter also promised users the following:

Fewer ads on their timeline
The option to post longer videos
Priority in replies and mentions

The relaunch includes a feature that enables companies to get a gold checkmark.

To avoid impersonations, governments will also have a gray checkmark.

Users can modify their username, display name, and profile photo, according to Twitter.

But if they did, their blue check would be forfeited until their account was again examined.

Elon Musk also disclosed that there would be other functionalities.

Early launch

An early version of Twitter Blue went live in November.

After some users started mimicking companies, the government, and prominent people, Musk promptly shut down the service.

One account tweeted that insulin was free while posing as the pharmaceutical company Eli Lily.

As a result of the false assertion, the company’s stock price fell sharply.

The same issue also plagued the website of the pharmaceutical business AbbVie.

It was once more delayed despite Musk’s assurances that the service would resume on November 29.

Musk

The CEO of Tesla and SpaceX paid $44 billion in October to purchase the social media site.

He has concentrated on Twitter Blue since taking over to replace advertising revenue.

The “huge lever” and the power of the people would be provided by the new verification mechanism, according to Musk.

Before his acquisition, Musk was a vociferous opponent of Twitter’s prior verification process since it favored users like:

Politicians
Executives
Members of the press
Organizations

Other social networking sites operated by Meta, like Facebook and Instagram, utilize similar verification mechanisms.

Users who were verified under Twitter’s previous strategy are now regarded as legacy verified accounts that “may not be notable” due to the debut of the new service.

Elon Musk announced Monday that all legacy blue checks would soon be destroyed.

“The way in which they were given out was corrupt and nonsensical,” said Musk.

References:

Twitter Blue relaunches, now costs $11 per month if you subscribe from an iPhone

Elon Musk may be luring Apple into a fight with Republicans

Elon Musk briefly slipped to second wealthiest man

Nicholas Alexander on December 12, 2022

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Elon Musk has long been known as the wealthiest man on earth, running the likes of Tesla, SpaceX and, most recently, Twitter.

However, his prestigious title could be transferred to another person, as happened recently.

The metric

On Wednesday, Elon Musk briefly slipped to second place on Forbes’ list of “real-time billionaires.”

The CEO of Twitter, SpaceX, and Tesla sat just behind Bernard Arnault for a moment.

On the same level as Musk, Arnault is the CEO of the French luxury brand LVMH.

He is also the creator of luxury products Hennessy Cognac and Louis Vuitton.

However, Forbes estimates Elon Musk’s net worth at $184.9 billion, which is higher than Arnault, who stands at $184.7 billion.

“The two men’s fortunes are nearly the same – separated by just $200 million,” Forbes noted.

“So it won’t be surprising if they continue to flip flop in Forbes’ rankings of the world’s wealthiest.”

The drop

Forbes explained that thanks to the flat shares of LVMH, Bernard Arnault has risen in the rankings.

Meanwhile, Elon Musk witnessed a dramatic drop in Tesla’s stock price, down 56% in 2022.

Musk’s strategy of appealing with friendliness to right-wing influencers on Twitter could also affect Tesla’s stock.

The Tesla CEO’s net worth peaked at $320 billion last November, according to Forbes.

Stocks and shares

Elon Musk had to sell more than $4 billion worth of Tesla stock to fund his $44 billion Twitter buyout.

However, the social media company is facing issues like layoffs, and advertisers are wary of Twitter’s management.

Additionally, Musk sold $14.5 billion worth of Tesla stock earlier this year when he announced his deal to buy the social media platform.

Estimating Elon Musk’s net worth will not be easy.

Most of his money is tied up in his private businesses, including:

Rocket and internet firm SpaceX
Tunneling outfit The Boring Company
Neuralink is a company dedicated to installing computer chips in people’s brains

Competition

Despite his losses, Elon Musk still ranks above others on the Forbes list.

Indian billionaire Gautam Adani took third place with a net worth of $134.8 billion.

Meanwhile, Amazon founder Jeff Bezos is now worth about $111.3 billion.

Elon Musk tops the Bloomberg Billionaires Index with a net worth of $179 billion.

Bernard Arnault, with $165 billion, follows him.

However, according to Bloomberg calculations, Musk has already lost $13 billion.

The list is updated daily after the market closes.

Reference:

Elon Musk is on the verge of losing his world’s richest person title

Elon Musk reveals life after buying Twitter

Edward Anderson on November 17, 2022

Elon Musk has had his hands full with the Twitter takeover in recent weeks.

The world’s richest man was asked on Monday about his takeover and leadership of his company, electric automaker Tesla.

According to the CEO, he worked “at the absolute most amount, from morning til [sic] night, seven days a week.”

The call

On Monday, Elon Musk participated in a business conference on the sidelines of the G20 summit in Bali.

Shedding light on his busy schedule via video link, he said:

“I have too much work on my plate, that is for sure.”

Elon Musk held his video call in a candlelit room.

Musk was speaking from an area where the power had just died out.

In addition, he was wearing a batik shirt sent by event organizers.

Juggling between Tesla and Twitter

Elon Musk is handling two companies: Tesla and Twitter.

During the meeting, Musk was asked if Tesla would be affected by his involvement with Twitter, which has become a target for investors and analysts.

Indonesia is targeting a deal with electric vehicle maker Tesla for battery investments.

They would like to do the same for Musk’s aerospace company, SpaceX, so that they can develop a rocket launch site.

However, Musk did not mention the deals with the country.

Instead, he said Indonesia is essential in the EV supply chain.

Musk also said it made sense for SpaceX to develop more launch sites around the world in the long term.

For now, the CEO of Twitter, Tesla and SpaceX is working on all companies to the best of his ability.

Reference:

Elon Musk says ‘I have too much work on my plate’

SpaceX and T-Mobile could beam signals from space with their collaboration

Leah Cooper on September 5, 2022

Last week, SpaceX founder Elon Musk and T-Mobile CEO Mike Sievert announced they were collaborating on a new project.

The announcement

On Thursday night, Musk and Stievart appeared at a webcast event at SpaceX’s starbase in South Texas.

The two companies are working on a project called “Coverage Above and Beyond,” which aims to bring smartphone connectivity to T-Mobile customers anywhere.

The service they offer is provided in areas without cellular coverage, especially in emergencies.

Above and Beyond coverage is set to launch in 2023, with T-Mobile using its midband spectrum to build a new network.

According to Sievert, the service will work with most phones and will prioritize the first launch of the SMS service.

“I think this is really a massive game changer,” said Musk. “In a nutshell, it’s no more dead zones.”

Press release

SpaceX and T-Mobile released a press release stating that the new plan will provide “provide near complete coverage in most places in the US — even in many of the most remote locations previously unreachable by traditional cell signals.”

“We’ve always thought differently about what it means to keep customers connected, and that’s why we’re working with the best to deliver coverage above and beyond anything customers have ever seen before,” said Mike Sievert.

“More than just a groundbreaking alliance, this represents two industry-shaking innovators challenging the old ways of doing things to create something entirely new that will further connect customers and scare competitors.”

Elon Musk joined in, saying:

“The important thing about this is that it means there are no dead zones anywhere in the world for your cell phone. We’re incredibly excited to do this with T-Mobile.”

Starlink coverage

Despite the seriousness of their partnership, Starlink’s coverage is not intended to replace the tower’s service.

Instead, it provides basic coverage for areas with little or no signal.

Above and Beyond coverage provides two to four megabits per “cellular area”.

This means they can receive 1,000 to 2,000 voicemail messages at a time or hundreds of thousands of text messages at the same time.

Due to the services, it will take some time for online games or video chat to be available in the near future.

However, Elon Musk and Mike Sievert are confident that the project will grow and expand Starlink’s direct telephone service internationally.

Competition

Despite the two companies’ announcement, they are not the only players in the game to use satellites to communicate with cell phones on the existing mobile spectrum.

A company called AST SpaceMobile has promised to bring broadband to phones from outer space.

Meanwhile another company, Lynk Global, has shown that its satellite “cell towers” can be used to send text messages from regular phones.

Despite the competition, Lynk and SpaceMobile are eagerly awaiting their competition.

“We love the validation and the attention that this is bringing to this technology,” said Charles Miller, CEO of Lynk.

“We’ve been getting all kinds of calls of carriers today who are like ‘Help us!’”

Lynk and SpaceX share the same goal: to partner with providers around the world so they can send messages on the satellite networks they are currently building.

Miller stressed the importance of technology during emergencies such as natural disasters that can destroy traditional cellular networks, namely hurricanes, fires, floods and earthquakes.

“It’s resilience,” said Miller. “It’s instant backup working for everybody on Earth. Your phones, even though the towns are down, can communicate.”

“This will save lives.”

Lynk

With two of the biggest players in the industry working together, Charles Miller has no worries.

According to Miller, Lynk was ahead of the market and said it was the first company to send text messages from space to an unmodified phone.

“We think there’s going to be more big companies jumping in.They have years and years to go. They’re years behind us,” Miller said.

“We’re going to be like, ‘Wonderful! Educate the world that this technology is done.’ And when we start rolling it out at the end of this year, people are going to go, ‘I want it.’ They’re not going to want to wait years for it.”

References:

SpaceX Starlink satellites to beam service straight to smartphones

Elon Musk’s SpaceX and T-Mobile to link satellites to mobile phones, ‘eliminating dead zones worldwide’

Satellite-to-phone companies are thrilled about SpaceX and T-Mobile, actually