Why Musk’s Twitter Bid Has Shaken Tesla Investors
Some shareholders say Mr. Musk’s off-the-cuff posts on Twitter — he once drew comparisons between Justin Trudeau, the prime minister of Canada, and Hitler — have already damaged Tesla.
“The guy has said so many controversial things,” said Kristin Hull, founder and chief executive of Nia Impact Capital, a fund in Oakland, Calif., that invests in companies with a positive social impact. “Are they distractions? Are they confusing? Has he interfered with the stock value through his tweets? Absolutely.”
How Elon Musk Bought Twitter
A blockbuster deal. Elon Musk, the world’s wealthiest man, capped what seemed an improbable attempt by the famously mercurial billionaire to buy Twitter for roughly $44 billion. Here’s how the deal unfolded:
With Mr. Musk becoming Twitter’s owner, “it only gets bigger,” Ms. Hull said. Nia recently sold most of its shares in Tesla, she said, because the fund was dissatisfied with the company’s response to accusations of racism at its factory in Fremont, Calif.
Mr. Musk’s ownership of Twitter could alienate some potential Tesla buyers. Among people considering buying an electric car, Democrats outnumber Republicans by almost two to one, according to Morning Consult, a research firm. But Democrats are also the group most likely to be put off if Mr. Musk, in the name of free speech, opens Twitter to extremist views or misinformation.
The Twitter acquisition could intensify scrutiny of Mr. Musk by stock market regulators. He has been sued by a Twitter shareholder who accuses him of missing the regulatory deadline to report that he had amassed a 5 percent stake in the platform.
The lawsuit, filed by Block & Leviton, a Boston law firm, claims that Mr. Musk saved himself tens of millions of dollars by waiting six days past the deadline to disclose his stake. He was able to continue buying Twitter shares more cheaply than would have been possible if his interest was public knowledge, the suit claims.
Mr. Musk has a long history of antagonism with the Securities and Exchange Commission. Last month he failed to convince a New York judge to release him from a 2018 agreement with the S.E.C. that requires him to have a company lawyer screen his social media posts if the statements could move Tesla’s share price.