[TAG0][TAG1]
- Elon Musk stated Wednesday that his tweets were good marketing for Tesla.
- Wall Street analysts think otherwise. They are bullish on Tesla but believe Musk is too distracted.
- Musk's tweets have caused problems with shareholders and the courts.
Elon Musk was able to make a long-awaited appearance on Wednesday at Tesla's fourth quarter earnings conference, which took place after the closing bell.
The CEO, true to his word, tweeted live from the earnings conference, while he gave positive stats about the company's current state. He stated that the January order rate was nearly twice that of production and that the company expects to produce 1.8 million cars by the end.
Other Tesla executives offered investors as many upsides possible to offset the negative press surrounding Musk (the carmaker's Technoking). An analyst still wanted to know how Musk, the new owner of Twitter, would mitigate the brand damage caused by his loose fingers. Musk responded by mentioning his 127 million followers on Twitter as a sign that Musk is "reasonably famous" and that Twitter is "an incredibly powerful tool to drive demand for Tesla."
He said, "And I would really encourage all companies, automotive and otherwise, to make more of Twitter." "The net benefit of Twitter, aside from some people complaining is enormous, clearly."
The attempt to make things more palatable worked in part. Several Wall Street analysts issued buy ratings for Tesla after the earnings call. Tesla stock rose more than 10% after its fourth quarter earnings results. Momentarily, investors are at ease, but remain cautious about the uncertainty surrounding the economy, and of course, Tesla's CEO.
They also want to make it clear that they aren't buying Musk's Twitter spin.
Wall Street is bullish about Tesla, but bearish about Musk
Tesla's fourth quarter revenues of $24.3 billion exceeded Wall Street's estimate of $24.2 billion. The Street's estimate of $1.13 was also higher than Tesla's $1.19 earnings per share. Tesla suffered some margin losses due to price cuts on its vehicles and the expansion of its Nevada factories.
Goldman Sachs equity analyst Mark Delaney stated in a note sent to clients that the stock would outperform the market at $200 with a price target. Delaney stated that there was one problem with his thesis, and it was the "key person risk," a reference to Musk.
John Murphy, Bank of America, considers Musk's "regular Twitter media updates" a negative for the stock as it serves "a distraction for TSLA Management." Murphy thinks the company is valued fairly and has taken a neutral position on shares.
Wedbush Securities' Dan Ives remains bullish about Tesla. Although he has been critical of the company's top brass, he seemed to praise Musk for his willingness to address the concerns about Twitter. He stated that Musk is "embracing the complex web relationship between Twitter and Tesla which will result in mixed reactions from investors."
Wall Street believes that Twitter is a distracting tool.
Musk is correct in stating that Tesla and he are quite popular on Twitter. Musk's number of 127 000 followers is second only to the former US President Barack Obama's number of 133 thousand. Tesla's 19 million followers is more than any other car company on the platform. (At first glance, BMW's 2.4million followers appears to be the closest.
How many of Musk's or Tesla's followers have converted to sales from the content they received? How many of those followers are bots or just there to watch the sideshow of the billionaire CEO? This is a question Musk didn't answer during the conference call.
Musk and the company may not want to admit it, but whatever the Technoking does and says on- and offline has had an impact on Tesla's brand and stock price.
The stock price of Tesla fell shortly after Musk announced the Twitter deal. Reports also revealed that Musk would use his Tesla shares as a means to finance the deal. Musk attempted to boost the stock price by promising he would not use Tesla shares. But that proved difficult to keep. Musk is reported to have sold Tesla shares worth $23 billion last year in support of the debt and equity purchase for Twitter at $44 billion.
After the October acquisition, shares fell even more and when Musk's brutal restructuring of the company made headlines, they also saw their stock drop again. The stock had lost 62% of its value since April by the time it reached 2022.
Musk's tweets have also caused problems with investors and Tesla owners. He testified last week at a shareholder trial to defend his 2018 "funding secured” tweet. Insider previously reported that Tesla investors and owners have been so upset by Musk's controversial tweets, that some have left the brand.
Tesla stock wasn't just in trouble last year because of Twitter drama. The company was facing supply-chain problems, inflation and changes to the Inflation Reduction Act. Inflation Reduction Act changes, supply-chain issues, inflation, and tightening consumer pockets caused a drop in demand. There's always more to the story, as with most things. But you can't ignore the impact Musk's tweet habits have on the economy.
Many analysts expressed excitement for Tesla's Investor Day, which will be held on March 1. The company will also share details about its growth plans. Ives noted that the tweet noise is beginning to fade and that the demand story will remain front and center in 2023.
—————————————————————————————————————————————
By: amartin@insider.com (Asia Martin)
Title: Elon Musk says his Twitter misadventure has only helped Tesla. Wall Street isn’t buying it.
Sourced From: www.businessinsider.com/elon-musk-twitter-tesla-wall-street-distraction-2023-1
Published Date: Fri, 27 Jan 2023 21:33:11 +0000
Related posts:
Tesla bull Gary Black, who rebuts recession claims, says investors don’t pay attention to Elon Musk on economics.
Wedbush predicts that Tesla earnings will lead to a further 38% increase in the stock following the release of positive guidance by the EV manufacturer.
Elon Musk is considering ways to cut down his Twitter debt
Elon Musk made certain that the jury was aware that short-sellers didn’t “sell of small stature” during the Tesla shareholder trial
Leave a Reply