Elon Musk is famous
for his extraordinary actions and big announcements. The richest man on Earth
has recently brought much news about his projects.
Having started the
acquisition of Twitter in April, he finally concluded the $44-billion deal on October
28.
Soon after, Mush took the company private. On November 8, the Twitter stock
was delisted from the New York Stock Exchange.
The question that interests
people now is simple: what’s next for Twitter?
In this article, FBS analysts go
through the latest news about the company and lay out their outlook. In
addition, they also share insights about Tesla – another business of Elon you
can still trade on the exchange.
Table of Contents
Twitter’s new chapter
It’s been a month for
Musk as the CEO of Twitter. During this time, he has taken plenty of controversial
steps.
To begin with, Twitter has laid off about 3,700 employees – half of its
workforce – and hundreds more have left since Musk stepped on board.
Among the layoffs are
many engineers responsible for fixing bugs and preventing service outages,
which raises doubts about the platform’s stability.
Twitter crash reports have
skyrocketed from less than 50 to around 350, according to Downdetector, a
website and app outage tracking website.
On November 16, Musk
sent an email to Twitter employees, noting that to create a disruptive Twitter
2.0 and succeed in an increasingly competitive environment, they “will
need to be extremely tough.”
Employees didn’t like that Musk was
ruthlessly changing the culture to introduce long hours and an intense work
pace.
Musk tweeted he didn’t
care about the resignations as “the best people stay.”
In his first
address to Twitter employees, he said that he could go bankrupt if the social
network didn’t bring in more money.
Of course, this turn
of events leaves traders wondering where this could take the company.
The
changes can disrupt the already shaky structure of the company. Now, without
core engineers and developers, Musk will need a lot of effort to make the
company great again.
Consequences for Tesla
Unfortunately, Musk’s
actions influence all his projects. Let’s see how Tesla is doing.
Tesla stock continued its
recent decline, hitting a two-year low on Monday. This is the lowest level
since November 2020. The reasons for this decline are the same that contributed
to the stock’s fall of more than 40% over the past three months.
Investors are
dumping Tesla stocks as Musk had to sell some of his own this year to fund the
Twitter acquisition. According to SEC, Musk has sold 19.5billion shares of the electric car company from November 4
to November 8.
Recently, he also had to spend plenty of his time and
energy on the social media company.
Tesla’s price drop can
also be attributed to the recently announced recall and renewed concerns about
COVID-19 restrictions in China.
Tesla’s largest factory is in Shanghai, and
investors fear a break in sales from that facility may have a noticeable impact
on the company’s fourth quarter results.
Still, there’s a
silver lining.
The latest news that affects the business and the brand has been
driving the stock lower and lower so it became rather cheap.
This could be an
opportunity for long-term investors to start investing in stocks as the
business outlook continues to grow.
The price has been moving between two trendlines
for the past year. Since September, the price has lost around 40%. However, it
can still climb back to 263 if it stays within the channel.
Conclusion
FBS analysts believe
that it will be interesting to observe Musk’s projects in the near future. Elon
is known as a person who knows how to think outside the box.
Now when Twitter
is private, it doesn’t have to make quarterly public disclosures about its
performance.
As a result, Musk can change the platform’s content rules, its
finances and its priorities without worrying about what investors would
think. Therefore, traders and long-term investors can keep an eye on the future
of Twitter as well as Tesla’s long-term growth.
