Tesla, Inc. (NASDAQ:TSLA) stock’s weakness could be in part attributed to Elon Musk’s purchase of social-media platform Twitter, which he has since then renamed as X, said Tesla investor and Future Fund Managing Partner Gary Black.
Did Twitter Hurt Tesla? Tesla has by far been the worst-performing “Magnificent Seven” stock since Musk announced his intention to buy Twitter in April 2022, Black noted. Magnificent Seven is the collective name given to seven mega-cap U.S. tech stocks.
$TSLA uberbulls won’t admit it but my liberal use of the phrase “Twitter overhang” proved highly accurate to describe the negative TSLA stock action in 2022/4Q (TSLA -55% vs NDX flat) as Elon was forced to sell $ billions of TSLA shares to pay for Twitter. Now $TSLA bears…
— Gary Black (@garyblack00) November 26, 2023
“Don’t let anyone fool you that $TSLA stock has done well since Elon announced he would acquire Twitter in April 2022,” Black said.
From trading around $328 ahead of the announcement, the stock has pulled back and is currently trading around $235, he noted. As opposed to Tesla’s 28% decline over the period, the Nasdaq 100 Index has risen 15%, he added.
Chart Courtesy of Benzinga
To gauge the impact of Twitter’s buy on Tesla shares, one has to measure the performance from when Musk announced plans to buy the social media platform, the fund manager said.
Giving his rationale, he noted that the billionaire began selling Tesla shares to fund the purchase soon after disclosing his intention to buy Twitter. Between April 2022 and August 2022, Musk sold $15 billion worth of Tesla stock and for 2022, the selling amounted to $23 billion, he added.
Black’s assertion came in reply to a post by Tesla influencer Omar Qazi, better known as Whole Mars Catalog, who said the weakness seen in Tesla stock was not due to Musk’s Twitter buy but due to the EV bubble popping. He made his case by sharing charts showing the one-year performances of Tesla, Rivian Automotive, Inc. (NASDAQ:RIVN), Lucid Group, Inc. (NASDAQ:LCID), and General Motors Corp. (NYSE:GM) shares.
Don’t let anyone fool you that $TSLA stock has done well since Elon announced he would acquire Twitter in April 2022. $TSLA has been by far the worst performer of the Mag 7 since then, dropping from $328 to its current level of $235…
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