Tesla suffers from Elon Musk’s Twitter meltdowns. The question is how much?

It’s hard to be a Tesla fan. The resale value of the company’s once-popular electric cars is falling, along with Tesla’s stock. CEO Elon Musk, meanwhile, was caught up in one Twitter mess after anotheroften caused by decisions like your recent moves to Temporarily invite when banned white supremacists and neo-Nazis.

Later today, there will be another test as the company will report its fiscal fourth quarter results, in which it will either prove the haters right or reignite the beliefs of many fans in the company.

The last three months have been a whirlwind, even for a company like Tesla, whose erratic CEO has already become a fixture in the Twitter sphere. with his tweets they divulge the future he foresees, while humiliating reporters who ask difficult questions. Since paying over $44 billion to take over as owner and CEO of Twitter, Musk has shifted that approach to overdrive, sharing conspiracy theories, attacking the trans community and tweeting with extremist political commentators.

Tesla shares, meanwhile, have dropped 65% over the past year, in part because Musk has turned customers off and spread too thin at a time when competition from giants like General Motors, BMW and Toyota heated. Shares in the company recouped some of their year-to-date losses, rising about 33% to $146.10 — still well below the company’s distribution-adjusted value. record $407 just over a year ago.

On Wednesday, the company is expected to announce its earnings and sales for the holiday season. Typically, this would be a mechanical financial release, where analysts and investors would read the data to get the latest information from the famous electric car maker. But this time, it could serve as a referendum on the company’s future and whether it will succeed, despite Musk’s shared attention to other projects like the SpaceX startup rocketdoctor start of neurallink and, of course, Twitter.

“A lot of bad news is already quoted in Tesla stock,” Wedbush analyst Daniel Ives wrote in a message to investors earlier this month. “The Cinderella ride is over for Tesla and Musk must now drive the business through this Category 5 macro dark storm rather than focusing on his new golden child of Twitter, which remains a distraction and an overwhelm for Tesla. company. .”

Many analysts used the term “distraction” to describe Musk’s apparent obsession with Twitter. He has come under fire for his time at the struggling social network since taking over as CEO.

“We believe that Mr. Musk is increasingly isolated as Twitter’s finance manager with his management of users on the platform,” analysts at Oppenheimer wrote in a message to investors last month when the company was among the first for years to downgrade Tesla stock from “Outperform” to “Perform”. “We see the potential for a negative feedback loop from advertiser and Twitter user exits… as Tesla’s competitive environment intensifies.”

In better times, Musk might have weathered this storm better. After all, he was previously the tech industry’s answer to billionaire comic book industrialist Tony Stark, aka Iron Man. And like all good modern drama, the main character is far from perfect and his future is equally uncertain.

Analysts on average expect Tesla to post a profit of $1.13 per share on nearly $24 billion in sales, according to research published by Yahoo Finance. That would equate to a 32% jump in profits from a 35% increase in sales.

Investors and analysts will also be listening closely to everything Musk says on a conference call after Wednesday’s earnings release. The company slashed prices on its cars by as much as 20% earlier this month, a move that analysts saw as a win for competitors, although it also upset current Tesla owners and dealers, who suddenly had to make do with paying more or sell less for their cars. used car.

“Price cuts have a huge impact [Tesla’s] economy,” Bernstein analyst Toni Sacconaghi said in a note to investors ahead of Tesla’s earnings report.

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