Many of Tesla’s financial backers are worried about the company’s reputation after CEO Elon Musk spent significant time and effort on Twitter in recent weeks.
Since the billionaire entrepreneur has focused so heavily on protecting free speech and eliminating efforts to limit the reach of conservative accounts, his $44 billion buyout of the social media business has drawn significant ire from lefties. Musk has also given media outside of Twitter copies of correspondence that show how previous Twitter officials tried to censor conservative voices and get rid of President Trump.
Future Fund Managing Partner Gary Black, whose firm holds $50 million of Tesla stock, said that markets suggest the Twitter issue has badly damaged the Tesla brand “.” Black’s comments come as instability in the social media business continues to unravel. “Proud to drive [their] Teslas to their friends or show off Teslas in their driveways,” consumers previously said, “Twitter’s contentious takeover is damaging Tesla’s brand equity.”
A new interim CEO should be appointed, and he used Warren Buffett’s famous quote, “In the short term, a market is a voting machine, but in the long run, it is a weighing machine,” to convey his hope that the harm to the Tesla brand will be transitory. Longtime Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management Ross Gerber recently questioned who controls the carmaker daily during this “critical period” for the firm.
Some prominent members of the political left on social media have uploaded evidence of their canceled preorders for Tesla Cybertrucks, citing Musk’s purchase of Twitter as the reason.
During November, when Musk made his Twitter acquisition, the company’s net favorability among Democrats dropped by 20.3%, according to a study conducted by Morning Consult. Republicans, on the other hand, had a 5.5% rise in net favorability over this time frame. SpaceX, Musk’s reusable rocket company to construct a permanent human settlement on Mars, also saw a decrease of 4.5 percentage points in net favorability among Democrats and an increase of 1.1 percentage points among Republicans.
For companies like Tesla and SpaceX, “the political spillover effects might have enormous repercussions,” according to research by Morning Consult. As the author puts it, “core electric car purchase characteristics tend to skew more liberal, so if the Tesla brand becomes increasingly right-leaning, it might put it out of harmony with them.”
Musk has stated that he is still in charge of Tesla and SpaceX, even though the teams there “are so outstanding that frequently little is needed” from him. This month, the serial entrepreneur stated in court that he has no interest in becoming CEO “of any firm.” He plans on spending less and less time on Twitter and eventually handing over leadership.
There appears to have been no effect on Twitter’s operations from Musk’s firing of around two-thirds of the company’s staff, which has generated headlines. As a result, many people in the startup and VC industries have lost their jobs to reduce expenses. Musk appears to have been alluding to the old Silicon Valley culture, where tenacious founders stretched every dollar and focused exclusively on economic success rather than social action, when he added, “Nature is therapeutic.”
In addition to the layoffs, Musk has warned the surviving Twitter employees that they would have to put in “very rigorous” hours if they want to keep their jobs, bringing the company’s culture in line with that of Tesla and SpaceX. He said the company will shift its focus from “design and product management” to “engineering and innovation.”