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Friday, July 1, 2022
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Musk’s Purchase of Twitter May Prove Costly


Logo of social network Twitter on smartphone screen with dollar bills, coins and photo Elon Musk in background. I Image by Sergei Elagin / Shutterstock

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Elon Musk’s interest in Twitter and his activity on the platform have many people talking. But some analysts are saying the Tesla CEO should remain focused on his automaking company rather than the social media giant.

Musk previously tweeted that Twitter should be a platform for free speech. He offered $44 billion to buy the company and take it private, though he declared, “I don’t care about the economics of it all.”

Since Twitter agreed to accept his offer, he has become increasingly vocal on the platform, Bloomberg reported. The Tesla CEO has critiqued the Biden administration on multiple fronts, and he has also announced that he will be voting Republican in the next election.

The CEO of Tesla said he once voted Democrat because they were the “party of kindness” but indicated that he has since changed his mind.

“They (the Democratic Party) have become the party of division and hate, so I can no longer support them and will vote Republican,” he wrote.

But Musk’s focus on Twitter might have come at a price. Not only has Tesla stock fallen, but Twitter’s has as well. Musk has lost approximately $12.3 billion due to the stock dip and $49 billion overall since he announced his plan to purchase Twitter.

Bloomberg reports that some of the losses are simply due to an overall tumble of stocks in the last week.

However, according to Reuters, Wedbush analyst Daniel Ives cut the target share price of Tesla after warning of “distraction risks” from Musk’s Twitter deal.

Drive Tesla Canada reports that Ives called Musk’s interest in buying Twitter a “circus show” and a “black eye” for Tesla’s stock. Ives recommended Musk refocus on Tesla and its ongoing supply chain crisis.

The Tesla CEO shot back on Twitter: “To be clear, I’m spending <5% (but actually) of my time on the Twitter acquisition. It ain’t rocket science! Yesterday was Giga Texas, today is Starbase. Tesla is on my mind 24/7.”

Even though he is still the world’s richest man, Musk has lost $60.4 billion of his overall wealth in 2022. Jeff Bezos is in a similar situation; Amazon stock is down, and Bezos has lost an estimated $62 billion.

Bezos and other billionaires, however, have not experienced one issue that Musk tweeted about on Wednesday: the S&P 500, which rates companies by ESG (Environmental, Social, and Governance) factors. While Exxon Mobil was cited as one of the “top ten best in the world,” Musk’s electric car manufacturing company Tesla was removed from the S&P list.

In Musk’s tweet about the S&P listing, he referred to ESG as a scam. Musk tweeted, “It (ESG) has been weaponized by phony social justice warriors.”

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