{"id":8034,"date":"2023-05-12T22:53:18","date_gmt":"2023-05-13T02:53:18","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/twitter-gets-new-ceo-tesla-stock-drops-anyway\/"},"modified":"2023-05-12T22:53:19","modified_gmt":"2023-05-13T02:53:19","slug":"twitter-gets-new-ceo-tesla-stock-drops-anyway","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=8034","title":{"rendered":"Twitter Gets New CEO. Tesla Stock Drops Anyway."},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

Tesla stock started Friday higher after Elon Musk said he\u2019s be assuming a reduced role at Twitter after naming a new CEO. Shares finished lower, however, as investors extrapolated a bit too much from the recent news.<\/p>\n

Here\u2019s what we know. Linda Yaccarino will become the new Twitter CEO, according to Musk. She \u201cwill focus primarily on business operations, while I focus on product design and new technology,\u201d Musk tweeted out on Friday. <\/p>\n

\n

Investors initially cheered the news. Tesla (ticker: TSLA) stock closed up $3.54, or $2.1%, at $172.08. on Thursday. And shares rose to start the day Friday. <\/p>\n

That move made sense. Tesla investors have been all but begging Musk to reduce his role at Twitter<\/a>. They have been worried about management distraction ever since Musk got involved with the social media company. A new CEO might also indicate the social media platform is performing better, which reduces the likelihood Musk will be selling more Tesla stock to fund losses.<\/p>\n

But the early gains evaporated and then some. Tesla stock closed down $4.10, or 2.4%, at $167.98 Friday, while the
\n S&P 500
\n and
\n Nasdaq Composite
\n were off about 0.2% and 0.4%, respectively. <\/p>\n

Why the about-face? Some investors seem to be looking for hidden messages in Musk\u2019s tweets about the appointment of Yaccarino, making connections to the timing of Tesla\u2019s annual shareholder meeting, and other news items. The biggest concern appears to be that Musk could step down as Tesla\u2019s CEO, perhaps to focus on product development.<\/p>\n

The game of connect-the-dots began when The Wall Street Journal suggested in a Thursday story CFO Zachary Kirkhorn could be a successor to Musk. It was published before the Twitter CEO news broke, and comes days before Tesla\u2019s 2023 annual shareholder meeting on May 20. The proximity to the Twitter announcement served to fuel speculation that Musk would step down at Tesla too. <\/p>\n

The rumblings were serious enough that investors and analysts felt the need to weigh in. \u201cTotal nonsense to speculate that [Musk] might give up his role as CEO at Tesla in addition to Twitter,\u201d tweeted Gary Black,
\n Future Fund Active ETF
\n (FFND) co-founder, on Friday morning, linking to a news story about the potential switch. <\/p>\n

He elaborated on those thoughts to Barron\u2019s<\/em>. \u201cFirst, Zach isn\u2019t the natural successor. Tom Zhu is,\u201d Black said. Zhu ran Tesla\u2019s business in China and is now the senior vice president of the automotive business. \u201cSecond, Elon is giving up the Twitter CEO role. Why would he give up Tesla CEO role as well?\u201d <\/p>\n

Wedbush analyst Dan Ives also was skeptical. \u201cBetter chance of me playing in NBA Playoffs than Musk stepping down at Tesla,\u201d Ives said. He rates Tesla shares Buy and has a $215 price target for the stock. <\/p>\n

Those two don\u2019t believe Musk is stepping down from Tesla. It can be difficult to disprove the colloquial negative, though. No one knows exactly what Musk will do. What is most likely is that he will stay CEO of his car company. <\/p>\n

Friday, Musk responded<\/a> to a tweet about the Twitter change signaling his commitment to Tesla with a simple \u201cYup.\u201d <\/p>\n

Maybe that will be enough to curb the speculation. Or maybe not. <\/p>\n

Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n