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The fuss raised on the Elon Musk-Twitter issue, to which the recent dizzying decline in Tesla shares is also linked, shows no sign of abating. Many investors are sure that Musk is to blame for this drop, the distraction that Twitter has brought him, as well as the huge amount of TSLA shares that the CEO sold to finance his work on the social network.
Musk finally spoke publicly on the matter, participating in a public Twitter Space with investors and analysts, including some with whom he had previously feuded, such as Ross Gerber.
According to Musk, Tesla’s decline is almost exclusively attributable to interest rates, which have prompted the flight of capital from shares, towards safer bonds as bond yields rise, and have also curbed the purchase of debt products.
The CEO also noted that he has not missed a single important appointment for Tesla, and that he does not see how he could have contributed better than he has. However, investors have retorted that Tesla’s performance on the stock market has been significantly lower than the other major stocks and the sector average, which is why they argue that it is the “embarrassment” caused by Musk that is causing capital to flee.
Then there is the matter of the large number of Tesla shares being sold to raise billions of dollars. Musk justified himself by claiming that he needed “dry powder” in case the economy goes in a bad direction as he himself has repeatedly predicted, but he also went too far in a promise: “Not selling stock for, I don’t know, a minimum of 18-24 months. You can count on me, no stock sales until 2025 or something like that. I needed to sell some stock just to make sure there was still some dry powder left to account for a worst case scenario… Not selling stock until probably two years from now. Definitely not next year under any circumstances.Probably not even next year“.
A certainly interesting and reassuring promise for investors, except that Musk had already made a similar statement last April, and everyone knows how things actually went. Anyone wishing to listen to the debate can find it at this link.
No further TSLA sales planned after today
Elon Musk (@elonmusk) April 29, 2022
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