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New Twitter CEO may free up Musk to steer Tesla through easing demand

Published 05/12/2023, 08:42 AM
Updated 05/12/2023, 12:11 PM
© Reuters. FILE PHOTO: Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, U.S. January 27, 2023.  REUTERS/Jonathan Ernst/File Photo
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By Akash Sriram

(Reuters) -Elon Musk's appointment of a new Twitter chief may free up the billionaire from a major distraction and allow him to focus more on Tesla (NASDAQ:TSLA) Inc, analysts said on Friday.

Tesla shares, which have gained 40% this year, reversed course to trade down about 2% as broader markets fell. The stock had its worst year in 2022, losing 65%, amid Musk's on-again, off-again offer for Twitter.

Musk said on Friday NBCUniversal executive Linda Yaccarino will take over as Twitter's CEO, as he steps aside to take on the role of chief technology officer at the company.

"Tesla investors are likely to celebrate this move too, with Musk's very hands-on approach at Twitter leading to concerns he had taken his eye off the ball at this EV giant," Hargreaves Lansdown analyst Sophie Lund-Yates said.

Ever since Musk bought Twitter in a $44 billion deal, Tesla investors have been worried that he may not be able to pay full attention to the company, which is in a price war with upstarts and legacy automakers.

"This is a fractional positive for Tesla shareholders because he will likely spend a little bit more time on Tesla," said Gene Munster, managing partner at Deepwater Asset Management. "However, there are other things that are competing for his time."

© Reuters. FILE PHOTO: Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, U.S. January 27, 2023.  REUTERS/Jonathan Ernst/File Photo

Although Twitter has taken much of Musk's time since its takeover, he still actively manages several other businesses such as SpaceX and Neuralink. Musk recently formed an AI company called TruthGPT to take on OpenAI's ChatGPT and Alphabet (NASDAQ:GOOGL) Inc's Bard.

Musk's involvement with Twitter has been quite chaotic. He has slashed thousands of jobs at the social media company, fired its top executive team, including its CEO, and has made many changes to its policies and strategy to rely less on ads and more on subscription money.

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