I have no idea whether Elon Musk plans to step down as Twitter’s CEO after losing a poll in which he posed the question of whether he should stay on. And I’m not convinced how much difference it will make if he does give up that role. After all, when Deng Xiaoping “stood down” as China’s leader, he continued to be in in charge. The only title he kept was chairman of the Chinese Contract Bridge Association, a nice touch at many levels.
Time will tell.
Meanwhile, CNBC’s Carl Quintanilla, well, tweets out a comment from the investment bank, Oppenheimer & Co, which is downgrading its recommendation on Tesla to a “Perform” (suggesting that the stock will perform in line with the market, which is pretty meaningless: The downgrade is what counts in this context).
Quintanilla quotes this from the Oppenheimer comment:
… we believe banning journalists without consistent defensible standards…is too much for a majority of consumers to continue supporting Mr. Musk … negative sentiment on #Twitter could linger long term .. and become an ongoing overhang on [Tesla].
I’ve no comment on the investment merits of the recommendation (it’s not what we do around here), but I doubt if most consumers are very bothered about the bans (which seem to have been lifted anyway).
On the other hand, I can imagine that different groups of Tesla investors may be concerned about the goings on in Twitter for any one of three reasons (two of which contradict each other). Some may think that the way that Musk has been running Twitter (more generally that is, not the journalist thing) raises questions about his judgment in ways that they don’t want to see in the CEO of a company in which they have invested. Others, by contrast, may remain Musk loyalists, but want him to focus on Tesla rather than spending so much time on Twitter. A third group of Tesla shareholders, which will contain members from the first and second groups, will worry that Musk is going to continue to sell blocks of Tesla stock (for reasons, I suspect, not unconnected with the Twitter acquisition), something that would weigh on the Tesla share price.
Meanwhile, Elizabeth Warren (once described by Musk as “Senator Karen”) is scenting opportunity for revenge and, probably, a power grab.
Senator Elizabeth Warren, Democrat of Massachusetts, is taking aim at an issue with more serious potential legal consequences: whether Mr. Musk has created a series of conflicts of interest with and misappropriation of resources from Tesla, the electric carmaker he also runs.
“As you know, it is the legal obligation of Tesla’s board to ensure that its C.E.O. is meeting all his legal responsibilities and serving as an effective leader,” Ms. Warren wrote in a letter to Robyn Denholm, Tesla’s chairwoman, on Sunday night. (Ms. Denholm did not respond to a request for comment.) While the chaos at Twitter isn’t Tesla’s concern, Ms. Warren raised the possibility that many of Mr. Musk’s actions may be shortchanging Tesla.
Ms. Warren asked whether Mr. Musk’s diverting of resources from Tesla — including software engineers and senior executives — is harming the carmaker. In her letter, the senator also questioned whether Mr. Musk’s assertion that their being seconded to Twitter was purely voluntary, citing an anonymous employee who told CNBC, “most would also feel it was impossible to turn down a direct request from Mr. Musk without later facing poor performance reviews or other consequences.”
Ms. Warren also suggested the possibility of Mr. Musk intentionally shortchanging either Twitter or Tesla to benefit the other, including Twitter potentially overcharging Tesla for ads or tweaking the social network’s algorithms to benefit the carmaker. She also asked the board whether content appearing on Twitter under Mr. Musk’s new content moderation, including a rise in misinformation and what the senator said was hate speech, could end up hurting Tesla’s reputation…
I don’t think that Warren cares too much about Tesla shareholders, and (although I am in no position to know for sure) some of her claims look to me like fishing expeditions, but Musk needs to watch out. Even if there’s no there there, bureaucratic harassment can be a nightmare. And Warren knows that.
The NYT:
There’s little love lost between Ms. Warren and Mr. Musk. The two have clashed before, including over the progressive senator’s demands to increase taxes on billionaires. Last month, Ms. Warren said, “I don’t think any billionaire ought to be the one who has that kind of power, to decide how Americans, how people around the world get a chance to talk to each other.” She added, “I got a real problem with him.”
Of course, “people around the world” have other ways in which they can talk to each other. Twitter, a product of the free markets that Warren despises, just opened up yet another way in which they could do so, and, for all Musk’s, uh, idiosyncrasies, it’s better controlled by him than by the likes of Warren or Europe’s speech police.