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

After Tesla recently released his results for the fourth quarter of 2022, CEO Elon Musk (Elon Musk) made a rare appearance on a conference call. In July 2021, Musk said he would no longer participate in Tesla's conference call unless something big happened.

As always, Musk tweeted in real time on the earnings call. This time, he released some favorable data in an attempt to quell market perception of weak demand for Tesla cars. Tesla ordered almost twice its capacity in January and is expected to deliver 1.8 million electric vehicles for the whole year, Mr Musk said.

Other Tesla executives also provided investors with as much good news as possible to offset a series of recent negative news for Mr Musk. But some analysts asked Musk: how will he alleviate the damage caused by frequent tweets to Tesla's brand?

In response, Musk mentioned his 127 million followers on the Twitter platform, a sign that, in his own words, he was "quite popular". "Twitter is an incredibly powerful tool that can drive demand for Tesla," Musk said. "

He added: "I will really encourage all kinds of companies to use Twitter more. Although a few people complain, the net worth of Twitter is huge."

To some extent, Musk's efforts to calm things down worked. After the earnings call, some Wall Street analysts gave Tesla a "buy" rating. Tesla's shares rose more than 10 per cent after the release of the fourth-quarter results.

Investors are at least temporarily relieved, but remain cautious about economic uncertainty and Mr Musk's next move. They also said they did not approve of Musk's adventurous behavior on Twitter.

Wall Street is bullish on Tesla, but bearish on Musk in the fourth quarter of 2022, Tesla's revenue was $24.3 billion, exceeding Wall Street expectations of $24.2 billion. Another piece of good news was earnings per share of $1.19, also exceeding Wall Street's expectations of $1.13. But Tesla's profit margins have been hit, in part because of price cuts on some cars and the expansion of factories in Nevada.

Mark Delany, an equity analyst at Goldman Sachs, said in a report that Tesla's shares would outperform the market and set a target price of $200. But Delany also pointed out that the above forecast faces a big challenge-"key person risk", that is, "Musk risk".

John Murphy of Bank of America believes Mr Musk's "regular updates" on Twitter are bad for the stock because it distracts Tesla's management. Murphy believes that Tesla's current valuation is fair, so he gives his stock a "neutral" rating.

Dan Ives, an analyst at Wedbush Securities Securities, an investment bank, remains bullish on Tesla. Although Ives often criticized Musk, this time praised Musk for not evading Twitter-related concerns. Ives said Musk is embracing the complex network of relationships between Twitter and Tesla, which will cause different reactions from investors.

Twitter is a costly distraction tool. Musk is right. He and Tesla are quite popular on Twitter. Musk has 127 million followers, second only to 133 million of former US President Obama. In addition, Tesla has more than 19 million followers, more than any other car company on Twitter.

But how many fans of Musk and Tesla will turn into purchases based on the content posted on these accounts? How many of these followers are robots, rarely used accounts, or just to get tidbits about Musk? This is a question that Musk did not answer in the conference call.

Whether Musk and Tesla are willing to admit this: no matter what Musk says and does online and offline, it affects Tesla's brand, which in turn affects Tesla's share price.

Last year, shortly after Musk announced the Twitter deal, it was reported that Musk would sell Tesla shares to support the deal, and Tesla's share price began to fall. Mr Musk then tried to reassure investors that Tesla shares would not be sold in an attempt to boost the company's share price. But Mr Musk did not deliver on his promise. It is reported that Musk sold $23 billion worth of Tesla shares last year to support the $44 billion acquisition of Twitter.

Last October, Musk completed a deal to buy Twitter. Soon, Musk carried out a brutal restructuring of Twitter, which spurred Tesla's share price to fall further. By 2022, Tesla's share price had fallen 62 per cent (compared with April).

In fact, Musk's tweets have got him into trouble for investors and Tesla owners. Last week, Musk's "Tesla privatization tweet case" opened again. Mr Musk argued at the trial that he could have sold SpaceX shares to support his plan to privatise Tesla in 2018.

Tesla shares are facing not only Twitter problems, but also supply chain problems, inflation and adjustments to the inflation reduction Act. Most importantly, due to economic uncertainty, consumers are tightening their pockets, causing demand for Tesla cars to plummet. As with everything else, there may be many reasons, but you can't deny the influence of Musk's Twitter habits.

Many analysts said they were looking forward to Tesla Investor Day on March 1. At that time, the company will share more information about its growth plans. Ives pointed out that the "Twitter noise" is beginning to dissipate, and the story of "demand" will be the top priority in 2023.

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