With Elon Musk’s turbulent two-month rule at Twitter and questions about demand for Tesla Inc.’s cars weighing on its shares, one analyst on Thursday laid out his top 10 priorities for a turnaround.
Priority No. 1? “Name a CEO of Twitter by the end of January.”
Analysts who follow the electric-vehicle maker have grown more concerned that Musk’s tenure at Twitter — which since October has been characterized by aggressive staff layoffs, temporary suspensions of journalists, deeper concerns about ad revenue and Musk’s efforts to unload some of his Tesla shares — has become a distraction. Earlier this month, Musk tweeted out a poll asking if he should “step down as head of Twitter.” A majority of respondents voted “Yes.”
Priority No. 2, Ives said, was: “Stop selling stock and no more boy that cried wolf or Pinocchio situation.” Ives wants Musk to formally adopt a plan for when he will sell shares, known as a 10b5-1, after selling nearly $40 billion in stock since November 2021.
Priority No. 3 involves cutting back on Musk’s typically aggressive growth forecasts for Tesla. “Lay out conservative 2023 delivery and targets given the darker macro,” he wrote. “The 50% growth target is not happening in our opinion, with 35%+ delivery growth a more hittable and realistic goal for 2023.”
No. 4 on that list called for greater attention on Tesla, rather than Twitter, while No. 5 called for announcing Cybertruck deliveries will begin by the end of next year, amid concerns about competition and production. No. 6 called for changes to Tesla’s board to add more people with experience in tech and electric vehicles. No. 7: A big share buyback. No. 8: More financial metrics and “transparency” around margins.
The last two items on that list also revolved around Twitter.
“The more political on Twitter that Musk becomes is a bad thing for selling EV cars to the masses,” read No. 9 on the list.
Lastly: “Lay out the strategic plan for Twitter,” the note said. “Right now very simply the fear is Twitter is bleeding money with advertisers fleeing (for now) which means more losses and therefore more Musk TSLA stock sales. Once a new CEO is in place lay out the 3-year strategy of Twitter and what this can become, Super App, ‘X,’ WeChat 2.0, etc.”
Shares of Tesla have fallen 65% year to date. By comparison, the S&P 500 index
is down 19% over that time.
While some analysts have praised Tesla’s margin profile, Wall Street has been concerned about growth in China and competition from other EV makers.
Still, shares of the company were up 8% on Thursday, after Morgan Stanley said the drop represented an “attractive entry point.“