Topline
Tesla CEO Elon Musk’s announcement that he will soon step aside as Twitter CEO will add billions in market value to the electric vehicle giant, according to one prominent analyst covering Tesla, whose investors are beginning to shake off their collective Twitter headache.
Key Facts
The removal of the “lingering albatross” of Musk’s tenure as Twitter CEO adds roughly $15 per share for Tesla, Wedbush analyst Dan Ives wrote in a note to clients Friday, referring to Musk’s Thursday afternoon tweet indicating he hired a CEO for Twitter who will start at the end of June, though Musk will remain chairman of the social media company’s board and its product chief.
A $15 add to Tesla’s current stock price represents about $47 billion in fresh market capitalization, bumping Tesla to a $586 billion valuation.
The initial market reaction to Musk’s cutting back at Twitter was positive, with shares gaining 2% in the 12 minutes of trading following Musk’s tweet and rising a further 2% early Friday.
It’s a “major step forward” for Tesla as Musk is “finally reading the room that has been around this Twitter nightmare and trying to balance Twitter, Tesla and SpaceX as CEO, an impossible task that needed to change,” Ives explained.
Shares of Tesla sank as much as 72% from an all-time high in 2021 after Musk bought Twitter and installed himself as its CEO, selling off about $23 billion of his Tesla stock to help fund the purchase and instituting a variety of controversial, politically motivated policies.
What To Watch For
NBCUniversal’s advertising chief Linda Yaccarino is Musk’s pick to succeed him as Twitter’s head honcho, according to several reports. Musk liked a tweet singing Yaccarino’s praises as a logical pick to lead Twitter, indicating Yaccarino is likely in fact his choice.
Key Background
One of the worst-performing stocks on the S&P 500 last year, Tesla shed nearly $800 billion in market cap from when Musk first disclosed his stake in Twitter in April to year’s end. Shares of the automaker are up about 60% this year thanks to resilient profit numbers in its first two earnings reports.
Big Number
58.3%. That’s how much of Musk’s $179.5 billion fortune is tied up in his stake in Tesla, compared to just 5% for Twitter, as of Forbes’ March calculations. The second-richest man in the world as of Friday, Musk was the wealthiest person alive for much of 2021 and 2022 and was worth as much as $320 billion in late 2021.
Crucial Quote
“I frankly don’t want to be CEO of any company,” Musk testified last November in Delaware court, vowing to find “somebody else to run Twitter” at an undetermined time.
Who Is Linda Yaccarino? The Ad Executive Elon Musk Has Reportedly Chosen To Succeed Him As Twitter CEO (Forbes)
Market Reacts To Musk ‘Antics’: Tesla Slides To 2-Year-Low As Twitter Embroiled In Controversy (Forbes)
Tesla Board Member Jabs At Elon Musk As Questions About Twitter Distractions Mount (Forbes)
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