Does the responsibility for Tesla’s plummeting stock prices lie with Twitter, currently known as X? Not entirely, but Steve Sosnick of Interactive Brokers suggests that Twitter has played a role by dividing Tesla’s history into two periods: Before Twitter (BT) and After X (AX).
In April 2022, when Elon Musk publicised his purchase of Twitter, Tesla had wrapped up an extraordinary streak of triumph, with its shares experiencing a near-twentyfold increase in the preceding two and half years. However, the situation has since drastically changed, as the company’s shares have observed a decline of nearly 40%.
According to Sosnick, the acquisition of Twitter/X might have been an unnecessary addition to the complex businesses Musk already had to juggle, including Tesla, SpaceX, and Starlink. These three companies all dealt with some aspect of transportation, resulting in a shared focus. A social media platform, on the other hand, is a different beast – one that can potentially distract. Sosnick opines that social media can greatly consume time and believes this could negatively affect one’s ability to efficiently run complicated businesses.
In addition, Musk’s progressively contentious activity on X has reportedly led some of Tesla’s key supporters to disassociate from the brand. Sosnick states that he knows of “several” individuals who have either sold or exchanged their Teslas as a result.
Although the distinction between the BT and AX periods can be viewed as overly simplistic, it should be noted that Tesla’s value had inflated to unjustifiable proportions by April 2022, indicating an imminent stock price adjustment. Furthermore, several market analysts speculated in 2022 whether the purchase of Twitter would be a distracting influence for Musk. The events of the past 30 months seem to have provided an answer to that question.