NEW YORK – Tesla has erased all its gains from the past 17 months as investors continue to sell off the stock in the wake of chief executive officer Elon Musk’s purchase of Twitter.
The electric-vehicle maker’s shares closed down 5 per cent to US$197.08 in New York on Monday, the lowest level since June 2021. It was the biggest contributor to the benchmark S&P 500 Index’s losses.
Tesla shares have been struggling for the most part of this year, swept up in the broader risk-off market trend. But the latest slide has come amid Mr Musk’s highly public acquisition of Twitter. The billionaire closed his Twitter deal on Oct 27 and has since been tweeting furiously about his many plans for overhauling the platform.
Tesla shares have dropped over 12 per cent since then, compared with a barely changed S&P 500 Index and a 1.9 per cent fall in the Nasdaq 100 Index.
Ever since Mr Musk stated his intention to buy the social media platform, Tesla investors have worried about the entrepreneur spreading himself too thin among several high-profile ventures. In particular, investors want him to focus on Tesla, which itself is going through a challenging time. Demand for cars is slowing in an inflationary environment, supply chain troubles still linger and raw material costs are stuck at high levels.
Advertisers’ take on Twitter’s new ownership
Advertisers are grappling with Twitter’s new ownership under the Tesla boss, who once tweeted “I hate advertising”. Below are reactions from some of the companies:
Ford Motor
A spokesman for Ford told CNBC that the automaker is not currently advertising on Twitter and had not been doing so prior to Mr Musk’s deal.
General Mills
The company known for its Cheerios and Lucky Charms cereals has paused advertising on Twitter, a company spokesman said last Thursday, adding that General Mills will monitor the direction that Twitter takes and evaluate its marketing spend.
General Motors
The largest automaker in the United States temporarily paused paid advertising on Twitter after Mr Musk completed his takeover of the social media company. The Detroit carmaker said it is “engaging with Twitter to understand the direction of the platform” under its new ownership.
Gilead Sciences
The HIV drugmaker and its unit Kite are in the “process of pausing advertising” on Twitter, monitoring their advertising spend and waiting to better understand how community standards and content moderation will be handled.
Havas Media Group
Havas Media Group, Vivendi’s advertising unit, is recommending that its clients “temporarily pause their Twitter ads in the US because of concerns about the company’s ability to monitor its content”, the Wall Street Journal (WSJ) reported.
Interpublic Group of Companies
The global advertising and marketing services firm recommended that its clients temporarily pause their advertisements on Twitter, WSJ reported.
L’Oreal
The cosmetics maker said it has not suspended ad spending on Twitter, denying a Financial Times report on Nov 2 that cited sources familiar with the matter.
Mondelez International
The maker of Oreos has paused advertising on Twitter, WSJ reported last Thursday, citing sources familiar with the matter.
Pfizer
Drugmaker Pfizer is among companies that have re-evaluated their decision to advertise on Twitter, following Mr Musk’s US$44 billion (S$62 billion) deal to take the social media firm private, WSJ reported.
Stellantis N.V.
The carmaker said it would pause all paid advertising posts on Twitter until the Dodge, Fiat and Chrysler parent company had a clearer understanding of the future of the platform under the leadership of Elon Musk.
Volkswagen
The automotive conglomerate, which includes brands such as Lamborghini, Audi, Seat and Porsche, said it has recommended its brands to pause paid advertising on Twitter until further notice. BLOOMBERG, REUTERS
