As Elon Musk fiddles with Twitter, Tesla stock tanking and on track for worst year ever
While some point to Musk’s Twitter focus as the problem, Tesla stock decline tracking with broader market decline
As Elon Musk continues to roil the Twitter-verse with mass layoffs, mercurial policy changes and controversial user reinstatements, his most profitable venture, the Tesla electric vehicle company, is having a no good very bad year as its stock has lost more than half its value so far in 2022, shaving tens of billions off Musk’s personal wealth.
Tesla stock was trading at $169.87 at the close of regular trading on Tuesday, down from a January peak of $402.67, a drop of more than 57% since the start of the year. The last time Tesla stock was down for a calendar year was 2016, when share prices dropped by 11%. Last year, Tesla stock gained almost 50%, and in 2020 share prices saw a stunning 700% surge in value according to data from Investors.com.
When it comes to Musk’s personal financial misfortune so far in 2022, Barron’s reports he has lost some $200 billion when combining Tesla stock value declines and how much he likely overpaid in his $44 billion purchase of Twitter.
While some Tesla investors have suggested Musk’s recent focus on Twitter was contributing to Tesla’s underperformance, Barron’s noted Tesla stock has been following a broader market downturn.
While Tesla stock is down 58%, the Nasdaq Composite Index is off about 30% over the same span. Tesla shares tend to be more volatile than the overall index, rising and falling faster when tech stocks are going up or down. In a year when the index is down 30%, investors should expect a stock like Tesla to drop about 43% based on its historic correlation with the market.
That means roughly 75% of the drop in Tesla stock, and Musk’s Tesla wealth, is due to nothing more than the overall movement of the market.
What does Elon Musk Twitter look like so far?
After laying off half of Twitter’s 7,500 employees earlier this month shortly following his takeover of the social media platform, Elon Musk dropped an email on the remaining staffers last Wednesday with an ultimatum.
Musk gave them until Thursday evening to either commit to working extra hours and being “extremely hardcore” employees or taking three months severance pay and leaving the company.
How did that turn out? On Friday afternoon, a report from The New York Times estimated some 1,200 employees decided to take a pass on the hardcore challenge and headed for the doors instead.
In the meantime, Musk has also reinstated a number of Twitter users who were previously under lifetime bans for their conduct on the platform. The most notable is former President Donald Trump, who says he’s not coming back.
Other former account holders that have been invited back to Twitter include satirical right-wing outlet Babylon Bee, comedian Kathy Griffin, Republican Congresswoman Marjorie Taylor Greene and conservative psychologist Jordan Peterson.
Is Twitter shutting down?
The number of engineers overseeing multiple critical systems has been reduced following Musk’s ultimatum, in some cases to near zero, according to people familiar with the situation who spoke to The Washington Post last week. Hashtags including #RIPTwitter, #TwitterDown and #Goodbye have been trending.
Some Twitter users — including politicians, embassies and government departments — have started preparing for the worst in case the site goes down permanently.
Fears that Twitter could go down are linked to the current staffing crisis. People familiar with the situation say many engineers working on critical systems have left, leaving the system vulnerable to problems and with few people left to fix them, according to The Washington Post.
The Post also reported that the departures are said to have had a major impact on teams working on misinformation and fake accounts, which could lead to an increase in online harassment or dangers for activists and others who use the site to share sensitive information.
Early Friday morning, Musk tweeted that Twitter volumes were up and the platform was “more alive than ever.”
Twitter advertisers are also leaving
Earlier this month, a coalition of groups and individuals known as “Stop Toxic Twitter,” which includes the Anti-Defamation League, Color Of Change and the NAACP, called on advertisers to pull out. But even before this, L’Oréal, Oreo maker Mondelez and Audi already temporarily pulled ad spending on Twitter, according to The San Francisco Chronicle.
Musk shared his sentiments over the loss of Twitter advertisers in tweets in which he suggested that advertisers are supporting “political ‘correctness’” in pulling out of the platform. Musk also tweeted earlier this month that the advertiser exodus is being driven by “activist” groups who Musk also accused of “trying to destroy free speech.”
Paid advertising on the platform, which boasts around 240 million daily users, is key to Twitter’s business model and reportedly accounts for about 90% of the company’s revenues.
How to archive your Twitter contacts
The Washington Post offered this handy guide to backing up your Twitter account data, just in case:
Twitter offers a backup option, however in the past week there have been reports that the files are delayed or not sent to users at all. In the past, Twitter said it can take 24 hours or longer for your data to be ready. Go ahead and put in a request to be safe.
Go to Settings → Your Account → Download an Archive of Your Data. After you jump through a few security hoops, you’ll be able to request your information as a zip file via the “request archive” button.
The archived information should include your account information, account history, apps and devices, account activity, interests and Ads data.
Once you’ve made the request, you’ll need to wait — and should receive an in-app notification when the archive is ready to be downloaded. After that, you’ll have a limited amount of time to access the files.