In a positive sense, the Tesla boss is a “jack of all trades.” Elon Musk has a hot iron in the fire on just about every interesting future topic. He is now adding a seat to Twitter’s board of directors, joining SpaceX, The Boring Company and Tesla. All that’s left is for Musk to get involved with a biotech company that has cloning at the top of its list. So good old Elon could get involved with even more corporations or send a double to current companies.
Tesla stock is suffering
Elon Musk dances at many weddings. A little comparison: Elon Musk now has more shares in Twitter than the company’s founder, Jack Dorsey. Not too long ago, he was CEO of Twitter. However, Dorsey’s resignation has been in demand for some time, as he was also CEO of Block at the same time. Confidence that Dorsey could continue to run both companies ebbed, and Twitter’s boss decided to block and resign from Twitter. Elon Musk isn’t getting big calls that he can’t do it all, at least not yet. Since Musk announced his move to Twitter, Tesla’s stock price has fallen nearly 10 percent. Are the two things related?
Interest rate fears return at the same time
The Nasdaq was down more than 2 percent on Tuesday and Wednesday. However, the reason for this was not Musk’s Twitter entry, but a speech by Fed Vice President Lael Brainard. In a speech, she once again made it unmistakably clear that the Federal Reserve had declared war on inflation by swiftly ending its loose monetary policy. The Beige Book, the minutes of the US central bank meeting, once again confirmed Brainard’s statements. With that, interest rate fears on Wall Street finally returned and who will they hit first? Right, tech stocks! And Tesla is one of them. So the setback is more likely due to the Fed’s monetary policy than Elon Musk’s next assignment.
reset an opportunity?
As long as there is no bad news from Tesla, there should be no criticism of Elon Musk. The automaker recently announced a new sales record for the first quarter. The plants in Texas and Grünheide near Berlin are already starting production. More records are likely to follow this year. Therefore, the Tesla setback should be seen more as an opportunity that should pay off in the coming years.
Ron Baron, head of investment firm Baron Capital and one of Tesla’s biggest investors for years, remains loyal to the stock, as he told CNBC today. He’s not worried that Musk’s recent decision to invest in Twitter could become a distraction. Rather the opposite occurs. Baron hopes that Tesla’s actions will bring him a lot of joy. “I think we’re going to make three, four, even five times our money on Tesla today.”
Ron Baron can’t say otherwise about the size of his Tesla stake, but he’s not alone in his assessment. Star investor Cathie Wood sees Tesla’s future story similar. Investors should trust these assessments and use double-digit pullbacks in holdings to enter or raise.
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By Markus Weingran
Photo: canadianPhotographer56 / shutterstock.com