After $700 bn drop, angry Tesla investors say Musk has ‘abandoned’ them

With a market capitalization of $1.2 trillion at the beginning of the year 2022, Tesla was regarded as one of the most valuable firms in the world. Elon Musk, the company’s CEO, was the richest person on the planet at the time because of his ownership stake in Tesla, which gave him a net worth of $300 bιllιon. He also won the admiration of a large number of dedicated investors.

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In January 2022, Leo KoGuan, who describes himself as the third-largest individual shareholder in Tesla, tweeted, “Tesla bulls, the future rainbow are here and now.” “Be happy for the lucky person that you are.”

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Some of those investors are beginning to have doubts about his ability to make sound decisions and his dedication to the innovative electric car company as the calendar year draws to a conclusion. Their dissatisfaction is centered on Musk’s pᴜrchase of Twitter in October for $44 bιllιon, which has dominated the attention of the bιllιonaire and dragged on Tesla share prices. Twitter was pᴜrchased for $44 bιllιon.

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The fact that Musk himself has sold almost $40 bιllιon worth of his own stake in the company in the past year, according to a report from Wedbush Securities, belies the bullish pronouncements he has made about the automaker’s prospects. This is perhaps the most irritating thing for Tesla investors to learn.

The value of Tesla’s stock has decreased by more than $700 bιllιon as a result of Elon Musk’s sale of bιllιons of dollars’ worth of the company’s shares and investors’ questions about his priorities. Investors have retweeted Musk’s April promise that “[n]o further TSLA sales planned after today.” On Wednesday, Musk filed a regulatory document that indicated he had sold an additional 22 million shares of Tesla for approximately $3.6 bιllιon. This move has been criticized by investors, who retweeted Musk’s promise that “[n]o further TSLA sales planned after today.”

In point of fact, a number of well-known investors are beginning to anticipate rain rather than sunshine.

KoGuan stated on Twitter on Wednesday that Elon had abandoned Tesla and that the company currently lacked a viable CEO. Tesla need and deserves to have a CEO who works full time in the company.

According to Dan Ives, an analyst at Wedbush Securities who covers Tesla and who spoke with CBS MoneyWatch, investors now have the impression that Musk has abandoned them. “The clock has struck twelve for investors, who have experienced a significant buildup of aggravation as Elon Musk looks to be doubling forward, rather than backing away.”

A request for comment was sent to Tesla, but the company did not immediately respond.

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Using Tesla “as an ATM”

Prior to Musk’s pᴜrchase of Twitter, the bιllιonaire was hailed as a visionary entrepreneur who could change the world with his innovative companies: Tesla, through the adoption of electric vehicles, and SpaceX, with its goal of sending humans into space. However, Musk’s pᴜrchase of Twitter has tarnished his reputation as a visionary entrepreneur.

However, through his unexpected pursuit of Twitter, Musk’s other passion, which is the protection of the right to free expression, became apparent. Jim Cantrell, a founder member of SpaceX, was quoted by CBS News as saying that the bιllιonaire wants the company to “to put an end to the authority of nation-states to impose restrictions on the liberties of individual citizens. He has never wavered in his commitment to the principle of free speech.”

Musk saw an opportunity to accomplish this objective through Twitter, despite the fact that he had been particularly critical of the content control criteria implemented by the social media business. Ives estimates that Musk’s $44 bιllιon acquisition price for Twitter was a $20 bιllιon overspend; nonetheless, securing that agreement did not come cheap.

As a result of the high cost of Twitter, Elon Musk has been forced to implement severe cost reduction measures at the social media network, including laying off more than half of the company’s workforce. However, in order to fund the company, he was going to need to utilize his most significant asset, which was Tesla shares.

According to Ives, “One of the larger concerns that investors have is that Musk is utilizing Tesla as an ATM machine.” That’s a significant cloud that’s been hanging over Tesla’s stock.

Tarnished brand?

Concerns over the CEO’s stock sales aren’t the only thing giving investors pause regarding Musk’s ownership of Twitter; other problems are beginning to surface as well. Musk’s commitment to “free expression” led reforms at the company, including the reinstatement of accounts that had been previously blocked, such as those belonging to former President Donald Truмp and far-right Republican politician Marjorie Taylor Greene.

Since Musk took control of the company, researchers have observed a Ԁrαmαtic increase in hate speech. And Musk himself has courted controversy and condemnation with some of his recent tweets, such as a post that went viral on Sunday and simultaneously made fun of pronoun usage while indicating that he believes the director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, should be prosecuted, although he did not specify why. The tweet in question was a response to a tweet that Fauci had made a joke about the use of pronouns.

On Sunday, Musk posted a tweet in which he said, “My pronouns are Prosecute/Fauci.”

Additionally, he has retweeted far-right memes and beliefs that, according to the Washington Post, have energized the QAnon movement, a fringe group that peddles a variety of conspiracy theories. He has also retweeted far-right memes and beliefs that have been attributed to the rise of the alt-right.

Analysts and investors believe that Musk’s desire to stoke controversy could damage the reputation of the Tesla brand among customers who find the philosophy of the alt-right and QAnon to be offensive.

“Elon Musk is an exceptionally talented executive leader. He will learn soon (if he hasn’t already) that the customer perceptions of Tesla EVs are suffering as a direct result of his divisive political views “On Wednesday, Tesla stakeholder and managing partner of the Future Fund Gary Black posted on Twitter his thoughts about the company. “Customers do not want their vehicles to be viewed negatively by others. They don’t want to feel ashamed about driving them at all, but rather proud as hell to do so.”

Ives made the observation that this might represent a significant threat to Tesla’s sales, particularly in light of the fact that Tesla’s competitors are releasing their own electric vehicles and aiming to take a portion of Tesla’s market share.

“In the end, you’re driving away fifty percent of the population for someone who is selling items to the masses,” he added. “It’s not worth it.” “Right now they are popping champagne in the 313 area code because it is a benefit for GM, Mercedes, and others in this EV arms race,” Ives added, referring to the area code for Detroit, where U.S. automakers are piling into electric cars. “Right now they are popping champagne in the 313 area code because it is a benefit for GM, Mercedes, and others in this EV arms race,” Ives added.

Coming up: Investor activism

The combination of slumping stock, a distracted CEO and concerns about the Tesla brand being tarnished are cooking up the potential for investor activism, Ives noted.

KoGuan and others are already urging Tesla to initiate a share buyback, which is when companies repᴜrchase their own shares on the open market. Because it reduces the number of publicly traded shares, such a step can help shore up or even boost a company’s stock price.

“We believe its getting to the point that more activism and growing investor frustration will force the board of Tesla to confront some of these issues head-on in the near term,” Ives wrote in a Thursday research note.