Tesla’s Elon Musk Picks Fight With Ross Gerber; Blames Fall On The Fed
Tesla’s (Nasdaq: TSLA) fall from grace is resulting in the loss of confidence amongst even the most ardent of supporters, with the latest being that of long-time Musk fanboy Ross Gerber, whom on Monday squared off with Musk.
The focal point of Gerber’s rant was something that many have been highlighting as one reason for the fall: Musk’s obsession with Twitter is hurting Tesla.
And yet, Musk, who was the richest man in the world until he bought Twitter, resolved to snap at Gerber and blame the Federal Reserve’s interest hikes for the decline, telling him to “go back and read your old Securities Analysis 101 textbook.”
Shares in the American electric car company have been on a downward trajectory for months, having fallen over 44% since Musk took over Twitter in late October, and 62% since April, when he said he was going to buy the social media platform.
Epsilon Theory’s Ben Hunt compared the stock’s year-to-date movement with carmakers Ford (NYSE: F) and General Motors (NYSE: GM) and found that shares in Ford and GM are also down, but not nearly as bad as Tesla’s.
Taking the ‘but Tesla is a tech company’ argument into consideration, tech stocks have taken a serious beating from soaring inflation and rising interest rates this year. Shares in e-commerce giant Amazon (Nasdaq: AMZN) are down 49.08%, while shares in social media giant Meta (Nasdaq: META) have fallen 64.62% year-to-date, but Tesla still takes the floor at 68.88%.
The S&P 500 and Nasdaq Indices also show that yes, the broader stock market has dropped, but not down to Tesla levels. The S&P 500 is down 16.6% while the Nasdaq 100 has fallen 32.9%
Gerber’s attitude towards Musk is also indicative of how shareholders in general feel about the Tesla CEO. Gerber was known to wax poetic about his adoration for Musk and the electric company.
In early November, Musk sat behind the stand to defend his $56 million pay package at the car company when a minor shareholder filed a lawsuit that alleges the package was unjust enrichment, and that Musk had full control over a board of directors made up of close friends and his brother Kimbal.
The suit described Musk as a “part-time CEO,” referring to his many concurrent pursuits, with Twitter only as a recent, but major addition. The night before he took the stand was the night he sent the Twitter 2.0 email to employees, asking them to either opt in or out of the “hardcore” environment he wants for the company.
Days before the trial, Tesla was taken out of Wedbush’s ‘Best Ideas’ list, with analyst Dan Ives calling the “Twitter train wreck disaster” Tesla’s albatross.
To make matters worse, the CEO has also been on a Tesla stock-selling spree. In the short period since the $44 billion deal to acquire Twitter was closed, Musk has sold $7.4 billion worth of Tesla stock. Year to date, he has sold about $40 billion. His stake, while still the largest in the company, is down from over 20% to 13.4%.
Musk for what its worth recently announced he would remain head of Twitter until he finds someone “foolish enough” to want to take over.
Information for this briefing was found via Twitter, Fortune, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.