Elon Musk defends Twitter distraction, vows again to stop selling TSLA stock

Tesla CEO Elon Musk joined the Twitter space today to address recent moves in TSLA stock and defend his recent actions from Tesla investors who have called on him to stop wasting time on Twitter, the social networking site he recently purchased.

Musk has faced many questions about his recent behavior with Twitter, as has involved most of his public time lately Getting into fights with investors or Trying to stop the routine spending bill.

Today is finally gone in the public Twitter space To talk about these issues, including with Ross Gerber, the aforementioned investor with whom he was sparring.

The main point of contention with Gerber has been over the source of TSLA’s recent price drop. Musk contends that federal interest rates are a major contributor, because they drive capital flight from equities to safer bonds as bond yields rise, and because they dampen demand for consumer products that are often bought with debt, such as cars (or, perhaps, Twitter itself, which Musk took out tens of billions in loans to buy it.)

But investment experts have disputed the assertion that Fed rates drove down TSLA stock, saying that Tesla’s performance has dragged Other stocks in the auto sector underperformed Even Bond yields remained steady. It certainly had an effect, but Musk may have overestimated that effect.

Part of the difference could be related to Musk’s recent big sales of Tesla stock, as he sold tens of billions over the past year to fund his Twitter acquisition (aka disaster, aka dumpster fire). In general, internal stock sales send a signal to the market that insiders, especially the CEO, may not have complete confidence in the company’s performance, and add negative pressure on the share price.

Musk’s sales have happened in high-profile fashion, and for inappropriate reasons, too. Tesla investors don’t seem to see the upside to these stock sales for Tesla’s future, though Musk says it will help the EV company in the long run.

Musk stated today that he will not sell any more shares:

“I’m not selling any stock for at least 18-24 months. You can count on me, no stock sales until 2025 or something. I needed to sell some stocks just to make sure there was still some dry powder to account for the worst case scenario. …I’m not going to sell the shares until probably two years from now. Certainly not next year under any circumstances. Probably not the year after either.”

Tesla CEO Elon Musk, Dec. 22, Twitter space

However, Musk has said this many times before, and he is still selling Tesla shares. Although arguably routine He will be the last person to sell TSLA stock Over the past decade, Musk has sold large chunks of stock multiple times over the past year. So investors might be happy to hear he’s finished selling, but they’ve heard it before.

No more TSLA sales planned after today

– Elon Musk (@elonmusk) April 29, 2022

Musk has also stated that “I get a little paranoid after going through a really tough recession,” suggesting that his companies might want to have cash on hand to weather what he sees as a coming recession, or at least some sort of “big drama.” “. This belief is likely behind Tesla’s hiring freezes and layoffs. Musk said, “If we had another situation in 2009, the stock price of everything would be lower.”

Since Twitter is his wholly owned private company, and Musk’s wealth is largely concentrated in TSLA stock, we’re not sure what other major fundraising avenues are available for Musk to free up more “dry powder” other than selling more Tesla stock or carrying more. Debts.

On the contrary, Musk even talked about the possibility of a stock buy back. Despite his recession concern, he also mentioned that the share price is currently low, and said his vote would be to buy back. Although this statement was eventually formulated that we are not in another recession of 2008-2009, which Musk believes we may be entering.

While many have noted Musk’s ramblings with Twitter, he has stated that “there’s not an important Tesla meeting I’ve missed all along. I’m not completely lost at work” and asked “Is there anything I could have done in the last couple of months that would help Tesla’s execution?” ?Literally I can’t think of anything.” But he also colorfully referred to Twitter by saying “If you cross catnip with crack, that’s what Twitter is for” — which isn’t exactly the kind of statement a person could make about something. it’s not addicted to.

Another question was asked by Earl Banning, better known as 28delayslater on Twitter, an investor and longtime fan who pointed out how Musk’s recent political statements have taken out Tesla’s luster for him and his family (including his children, one of whom is transgender, a group that Musk’s tweets have negatively targeted). Recently). This is something we’ve seen in the data, as Tesla has lost public support over these divisive statements.

Musk has said that he does not hate transgender people, and “doesn’t want to hate anyone.” Banning tried to order a follow-up, but was cut off.

Take Electric

Well, that was an amazing sight. It would have been nice to see Musk get back to focusing on Tesla for once, after so much Twitter-related nonsense for so long.

But it sounded like he was saying what anyone wanted to hear. On the one hand, he believes that there will be a recession, and on the other hand, he believes that Tesla can do buybacks. On the one hand, he wants companies to have dry powder ready, but on the other hand, he would never sell stocks in order to free up cash (as mentioned before, after which he still sells stocks).

So with such a recent history of conflicting statements, it’s hard to take any of them seriously. Still, the market appeared to be relieved by Musk’s words, as the stock rose about two and a half percent in after-hours trading, mostly after his statement that he would no longer sell the shares.

But in terms of our answer to one specific question he asked on the call: “Is there anything I could have done in the last two months that would have helped Tesla’s execution?”

Yes, there is something. As Gerber said, Tesla stock has been down lately because it has been operating without the CEO’s focus. For Tesla to function properly, it needs either a focused CEO who can help it deliver (perhaps by stepping down from Twitter, as Musk promised, and then reversing that promise), or at least a COO who can replace the CEO while the president The executive is busy with “catnip crossed with crack.”

SpaceX has this in COO Gwynne Shotwell, who has done well for that company. Perhaps Tesla needs someone similar (possibly Tom Zhu, head of Tesla China?).