Musk has managed both Twitter and Tesla since last year.
Marlena Sloss/Bloomberg
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Elon Musk said he had found a CEO for Twitter, but did not specify who that was.
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investors are nevertheless satisfied.
The Tesla CEO (ticker: TSLA) posted on Twitter around 3:45 p.m. ET: “Excited to announce that I have hired a new CEO for X/Twitter. She will start in ~6 weeks!
This was a relief for Tesla investors. Tesla stock jumped about $3 after the tweet. Shares closed up $3.54, or 2.1%, at $172.08. THE
S&P500
closed down 0.2%. THE
Nasdaq Compound
gained 0.2%. Tesla stock was up another $1.20, or 0.7%, after hours trading at $173.28 per share.
Investors worry that Musk is too busy or distracted by his social media platform. Tesla stock was around $225 a share before Musk took over Twitter. Shares closed 2022 at around $123, falling around 45% over a period when the Nasdaq fell around 3%.
Management distraction is difficult to measure. Musk has been involved on Twitter for about a year. Perhaps no Twitter could have meant faster development of a cheaper new model or faster launch of Cybertruck. It’s only speculation. Tesla did not respond to a request for comment.
Tesla and Musk seemed to be aware of the distraction problem. Tesla’s investor event in March featured many managers that investors have never heard of in the past. This is the first time investors have had the opportunity to gauge the depth of Tesla’s management talent.
It’s hard to tell how much of the underperformance was related to the auto market, the overall economy, or Musk’s Twitter buy. Investors view the hiring of Twitter’s CEO as a big deal.
Future Fund Active ETF
(FFND) Tesla co-founder and shareholder Gary Black simply tweeted “Awesome! Great for Tesla shareholders and great for Twitter.
black says Barrons the decision to hire a CEO could be worth 3-5% to Tesla stock in the short term. “It’s still six weeks away,” adding “That suggests Twitter needs to do a lot better.”
Better Twitter performance would benefit Tesla shareholders tangentially, by reducing pressure on Musk to sell Tesla stock to fund Twitter’s losses. Musk’s stock sales have been a frustrating source of Tesla stock volatility for Tesla shareholders.
“I do not understand why [Tesla’s] the board of directors allowed Elon to drive down the price of Tesla stock,” said Leo Koguan Barrons recently. He is one of Tesla’s largest individual shareholders and was buying shares while Musk was selling shares in late 2022.
Koguan also pointed out that the
disney
(DIS) changed CEOs and the former CEO was “not working full-time at another company”.
Musk, however, always had more than one job when he ran Tesla. Investors hadn’t complained much before Twitter.
Write to Al Root at allen.root@dowjones.com
