Elon Musk’s appointment of a new CEO for Twitter could alleviate a significant distraction for the tech magnate, enabling him to devote more attention to Tesla, which is currently facing challenges related to decreasing demand for its electric vehicles, analysts observe.
Shares of Tesla, the foremost electric vehicle manufacturer globally, gained approximately 2 percent in pre-market trading on Friday, building on a 40 percent increase this year. In contrast, the company experienced a steep 65 percent decline in its stock value during 2022, largely attributed to Musk’s fluctuating acquisition endeavors involving Twitter.
Since completing the $44 billion (around Rs. 3,61,490 crore) Twitter acquisition, investors in Tesla have expressed concerns about Musk’s ability to maintain his focus on the car manufacturer, especially as it engages in a competitive pricing strategy against newer entrants and established automakers.
Gene Munster, Managing Partner at Deepwater Asset Management, noted, “This is a small positive for Tesla shareholders because he will likely devote a bit more time to Tesla. However, there are numerous other demands on his time.”
On Thursday, Musk announced the identification of a new CEO for Twitter, although he did not disclose the individual’s name. According to reports from The Wall Street Journal, Linda Yaccarino, an executive from Comcast NBCUniversal, is in discussions regarding the position.
Musk confirmed that he will assume the role of Chief Technology Officer at Twitter.
Sophie Lund-Yates, an analyst at Hargreaves Lansdown, remarked, “Tesla investors are likely to welcome this decision, considering Musk’s hands-on approach at Twitter has raised concerns over his focus on the electric vehicle giant.”
While Twitter has consumed much of Musk’s time following its acquisition, he continues to oversee other ventures, including SpaceX and Neuralink. Recently, he also launched an AI company, TruthGPT, aimed at competing with OpenAI’s ChatGPT and Alphabet’s Bard.
Musk’s tenure at Twitter has been marked by significant upheaval, including job cuts numbering in the thousands, the dismissal of high-ranking executives, and numerous shifts in the company’s policies to reduce reliance on advertising revenue in favor of subscription services.
© Thomson Reuters 2023
