As the dust settles over the $44 billion buyout of Elon Musk’s Twitter, analysts and investors are debating an important question — has the billionaire entrepreneur behind Tesla and SpaceX bitten off more than he could chew?
Musk, who also runs brain-chip startup Neuralink and the Boring Company tunneling firm, is expected to become the interim head of Twitter, according to a person familiar with the matter, after he fired CEO Parag Agarwal and other top executives at the company. .
“He’s stretching himself thin,” said Dennis Dick, retail trader at Triple D Trading.
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“You have to be concerned that maybe we’re not going to pay as much attention to Tesla as we (get) in the past because Twitter is going to be a big project for that.”
The stakes are high for Tesla, which is ramping up production at two mega-factories in Texas and Germany and faces increasing competition from legacy automakers such as Ford Motors and General Motors Co.
Tesla’s stock has lost nearly a third of its market value since Musk offered to buy Twitter in April, with the benchmark S&P 500 index more than doubling in the same period.
Musk has said he wants to “defeat” spam bots on Twitter, have fewer limits on content that can be posted and prevent the platform from becoming an echo chamber for division.
But he did not give details on how he would achieve all this and who would run the company.
Mike Ramsey, vice president of automotive at Gartner, also said Tesla’s leadership hierarchy was not as clear as that of SpaceX and that people at the electric-vehicle maker would have to step in to take charge of operations.
Tesla’s sales may also have been affected by Musk’s actions to open up Twitter to some previously banned individuals — though whether that’s a net positive or a negative is up for debate.
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“Buying Twitter can be a turnoff for some customers, but at the same time, we think it can open up an opportunity for new customers,” said CFRA Research Analyst Garrett Nelson.
Nelson is among those who believe Musk can handle a variety of roles while fulfilling Tesla’s goals.
“If anyone is capable of juggling this in our view, you know it’s Elon,” he said.
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