Shulou(Shulou.com)11/24 Report--

On December 20, as the share price of Tesla, a US electric car maker, continued to fall, shareholders put more and more pressure on Elon Musk, the company's chief executive. He has to choose between social media Twitter and Tesla. Considering all aspects, Musk will choose Tesla.

Musk appeared in the stands of the Qatar World Cup final with Jared Kushner, son-in-law of the former US president, on Sunday. After the game, Musk launched a Twitter poll asking whether he should resign as CEO.

More than 17 million people voted, and 57.5% thought Musk should resign as chief executive of Twitter. Mr Musk said he would "comply with the results of this poll", prompting speculation that Mr Musk would resign and what suitable alternatives he might have.

The survey comes shortly after Musk released a new Twitter platform policy that forbids users from promoting their accounts on other social media such as Instagram, Mastodon and Nostr, meaning that users can no longer include links to other social media profiles in their Twitter profiles or send tweets to guide users to their Instagram or Facebook accounts. This makes users very disgusted. As a result, Twitter deleted the policy in less than 12 hours.

Dan Ives, managing director of equity research at Wedbush Securities Securities, said in an analyst report on Monday that the results of the Musk poll were not surprising "because the platform has suffered an unprecedented fiasco since Musk took over Twitter at the end of October this year."

The survey was finally conducted when Musk himself needed to decide whether to run Tesla or Twitter. Last week Tesla suffered a double whammy from analysts and shareholders, forcing Mr Musk to choose between the two companies.

He is choosing Tesla. After all, the company's stock accounts for nearly half of Musk's $156 billion fortune, and the Twitter poll gives him a reason to quit.

Under pressure, the Tesla public has been questioning how Musk manages so many companies. Just overseeing electric carmaker Tesla, space company SpaceX, tunnel digger Boring Company and brain-computer interface startup Neuralink is enough to keep him busy.

When Twitter joins him, Tesla's investors are bound to worry that Musk has another responsibility on his shoulders. That worry peaked last week.

On December 14, Leo KoGuan, Tesla's third-largest individual shareholder, publicly expressed his dissatisfaction with Musk on Twitter, implying that he "has given up Tesla and Tesla does not have a chief executive." 'Musk should find a successor who is independently supervised by the board,'he said.

Ross Gerber, Tesla shareholder and chief executive of Kawasaki Wealth Investment Management, also tweeted on Saturday: "Musk's return to Tesla's full-time job is in the best interest of Tesla's shareholders."

Investors are rightly disappointed. Last week, Musk sold 22 million shares of Tesla, worth about $3.6 billion, according to SEC filings. Tesla's market capitalization fell to less than $500 billion for the first time since November 2020.

"if you look at Tesla's share price, it's still falling," said Chris Beauchamp, chief market analyst at IG, the investment agency. "I think the market is thinking, 'the people who led the company to where it is now are distracted.'"

Twitter debt problems Musk has sold about $23 billion of Tesla shares since he announced his acquisition of Twitter. After trying to pull out of the deal, Musk himself may have realized that his stakes on Twitter are growing.

In addition to stakes from outside investors such as Sequoia Capital and the Qatar Investment Authority, the deal includes $13 billion in debt financing from bank consortia such as Morgan Stanley, Bank of America and Barclays.

In an analyst report released on December 14, Wade Bush Securities analyst Ives said: "Twitter's nightmare continues. Musk uses Tesla as his ATM to continue to fund Twitter, which is heavily indebted. But Twitter's debt problem is getting more and more serious day by day."

When interest rates were low and Tesla's share price soared, Twitter debt was not a big problem. When Musk came up with the idea of buying Twitter for $44 billion earlier this year, it was not difficult to use the rise in Tesla's shares to drive his crazy bets.

But as the Fed continues to raise interest rates to curb inflation, using Tesla shares to repay debt for the acquisition of Twitter is a big problem for the company as a whole.

"this is a major burden on companies because debt will become more expensive, or it may be more expensive," Beauchamp said. "this is another thing to worry about."

Musk seems to be painfully aware of the negative effects of a full-blown recession in the United States. Shortly before the news of the sale of Tesla shares was made public on December 13, Musk wrote on Twitter: "in a volatile macroeconomic environment, especially as the Fed continues to raise interest rates, beware of debt."

He also tried to blame the Fed for the loss of about $600 billion in Tesla's market value. In response to Gerber's tweet, Musk said, "Tesla's operation is better than ever before," but "we can't control the Fed."

However, the challenges facing Tesla do not stop there. The performance of the company's shares significantly underperformed the NASDAQ in 2022. By contrast, while many technology companies face the same headwind, share prices have not plummeted as much.

"Tesla is a Musk concept stock to a large extent," Beauchamp said. Tesla's rise and fall depends on Musk. " On Monday, Tesla shares responded positively to the findings of the investigation initiated by Mr Musk, rising nearly 5 per cent.

Musk has previously said he will find someone else to run Twitter in due course. Some of Musk's close allies, such as computer scientist and podcast host Lex Friedman (Lex Fridman), have volunteered to run the social media company.

But Musk seems to know exactly how difficult Twitter's task is. At a time when advertisers are fleeing the Twitter platform, he has screwed up several new plans, such as the new Blue V certification service.

On Sunday, Musk wrote on Twitter: "No one wants a job that will really keep Twitter alive." there is no successor. "

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