Elon Musk crunching his own empire to fight for free speech

He has always been a polarising figure but now Elon Musk is starting to give some of his closest colleagues the jitters as he continues trying to make his acquisition of Twitter work.

Not only was the $66 billion purchase of Twitter one of the most overvalued technology buys ever seen, it has also led to a series of knock-on effects that have caused even Musk fans to query his business vision.

One of those effects has been to keep selling large numbers of Tesla shares – already almost $60 billion with the possibility of more to come as he scrambles for cash for the acquisition and to cover Twitter’s losses.

Overhang depressing Tesla shares

As anybody with any knowledge of the share market knows, when you have a big seller of a stock you get an overhang situation, and the stock price drops. This is exactly what has happened to Tesla, which is now down more than 60% this year and 17% in the past month alone.

With some advertisers leaving Twitter and the already barely profitable company also being saddled with a much bigger debt load, it is difficult to see the big social media company doing anything much apart from generating losses for the near term.

This has led many investors to think that Mr Musk will continue to raid the Tesla piggy bank as a way to keep the weak parts of his empire afloat, even after he promised he is “done” selling Tesla shares, only to go back on that promise later.

Musk no longer the world’s richest man

Already the savage fall in Tesla shares has toppled Mr Musk as the world’s richest person, with French billionaire Bernard Arnault now holding the title.

Tesla shares are also one of the worst performing US stocks this year, lagging behind the performances of rival car makers such as GM and Ford and falling more than technology giants such as Apple and Amazon.

Elon spending most of his time on Twitter

Another issue is that Mr Musk is now spending most of his time bedding down the Twitter acquisition, which has left the other parts of his empire to fend for themselves.

Tesla’s third largest individual shareholder and big Musk fan, KoGuan Leo, said that “Elon abandoned Tesla and Tesla has no working CEO”.

“Are we merely Elon’s foolish bag holders? An executioner, Tim Cook-like is needed, not Elon,” he said, referring to the Apple chief executive officer.

Perhaps leaving Tesla to fend for itself wouldn’t matter so much, but the company is undergoing lots of problems of its own with production disruptions due to China lockdowns and shortages in supply, and raging price increases for raw materials.

Tesla recalls hurt

Tesla has also been through a series of vehicle recalls with 321,000 vehicles in the US recalled because of a tail light issue and more than 40,000 vehicles recalled over possible problems with the electric power steering system.

Perhaps the most worrying of all of the issues though is that Mr Musk is playing a ‘Trump-like’ game of saying outrageous things on Twitter to keep the social media giant in the news but these controversies do nothing to help car customers buy Teslas.

Musk stunts putting off Tesla buyers

When he pulls a stunt like saying that his pronouns are “Prosecute/Fauci”, he does nothing to encourage progressive voters who might otherwise be keen buyers of Tesla cars.

While more than a million people have liked that pronoun post, there is little doubt that such rhetoric is starting to damage the Elon Musk brand and by inference, Tesla and the rest of the Musk companies that are so identified with their founder.

Fortunately, not everybody has jumped off the Tesla bandwagon and some brokers still rate it as a buy, saying that once fears about the Twitter share sale overhang reduce, the market will once again focus on the positive Tesla growth story, which remains intact.

With the electric car revolution still having a long way to go and Tesla being arguably the best positioned electric vehicle company in the world to ride that wave, there is still room to be a true believer.

And if Elon Musk can somehow reach an equilibrium between reviving Twitter and continuing to support the success of his other companies, particularly standard bearer Tesla, he may even regain his title as the world’s richest man one day.

However his play for Twitter seems to be more than just a financial move, have previously stated, “I think part of having free speech is that you get to hear things that you don’t agree with, and if someone’s saying something that you don’t agree with, then you can say something back. But I don’t think it’s right to censor someone just because you disagree with them.”

This quote was made in reference to the debate around free speech on social media platforms, and Musk’s belief that people should be able to express their opinions freely without fear of censorship.