Why Musk’s Twitter Bid Has Shaken Tesla Traders

Some shareholders say Mr. Musk’s off-the-cuff posts on Twitter — he as soon as drew comparisons between Justin Trudeau, the prime minister of Canada, and Hitler — have already broken Tesla.

“The man has mentioned so many controversial issues,” mentioned Kristin Hull, founder and chief government of Nia Affect Capital, a fund in Oakland, Calif., that invests in firms with a optimistic social affect. “Are they distractions? Are they complicated? Has he interfered with the inventory worth by way of his tweets? Completely.”

With Mr. Musk turning into Twitter’s proprietor, “it solely will get greater,” mentioned Dr. Hull, who was an educator earlier than turning to socially oriented investing. Nia just lately offered most of its shares in Tesla, she mentioned, as a result of the fund was dissatisfied with the corporate’s response to accusations of racism at its manufacturing facility in Fremont, Calif.

Mr. Musk’s possession of Twitter may alienate some potential Tesla patrons. Amongst individuals contemplating shopping for an electrical automotive, Democrats outnumber Republicans by virtually two to at least one, according to Morning Consult, a analysis agency. However Democrats are additionally the group almost certainly to be postpone if Mr. Musk, within the identify of free speech, opens Twitter to extremist views or misinformation.

The Twitter acquisition may intensify scrutiny of Mr. Musk by inventory market regulators. He has been sued by a Twitter shareholder who accuses him of lacking the regulatory deadline to report that he had amassed a 5 p.c stake within the platform.

The lawsuit, filed by Block & Leviton, a Boston legislation agency, claims that Mr. Musk saved himself tens of hundreds of thousands of {dollars} by ready six days previous the deadline to reveal his stake. He was in a position to proceed shopping for Twitter shares extra cheaply than would have been attainable if his curiosity was public data, the swimsuit claims.

Mr. Musk has a protracted historical past of antagonism with the Securities and Change Fee. Final month he failed to convince a New York judge to launch him from a 2018 settlement with the S.E.C. that requires him to have an organization lawyer display his social media posts if the statements may transfer Tesla’s share worth.