Why Musk’s Twitter offer shocked Tesla investors

Some shareholders say Mr. Musk’s tweets – he once compared Canadian Prime Minister Justin Trudeau and Hitler – have already damaged Tesla.

“The guy said so many controversial things,” said Christine Hall, co-founder and CEO of Nia Impact Capital, a fund based in Auckland, California, which invests in companies with positive social impact. “Are they distractions? Are they confusing? Did he interfere in the value of the shares through his tweets? absolutely.”

“Once Mr. Musk becomes the owner of Twitter, ‘he’re just getting bigger,'” Ms. Hall said. He said Niamh had recently sold most of its shares in Tesla because the fund was unhappy with the company’s response to racism allegations at its plant in Fremont, California.

Mr. Musk’s ownership of Twitter may alienate some potential Tesla buyers. Among the people considering buying an electric car, Democrats outnumber Republicans by nearly one in two, according to Morning Consult, a research firm. But Democrats are also the group that is likely to be delayed if Mr. Musk, in the name of freedom of speech, opens up to Twitter for extremist views and misinformation.

The acquisition of Twitter may strengthen Mr. Musk’s scrutiny by stock market regulators. He was sued by a Twitter shareholder, accusing him of missing a regulatory deadline to claim he had accumulated 5 per cent of the platform.

A lawsuit filed by Boston law firm Block & Leviton alleges that Mr. Musk saved tens of millions of dollars to disclose his share six days before the deadline. He could have continued to buy Twitter shares at a lower price than would have been possible if his interest had been public knowledge, the lawsuit said.

Mr. Musk has a long history of antagonism with the Securities and Exchange Commission. Last month, he failed to persuade a New York judge to release him from a 2018 deal with the SEC that requires the company’s lawyer to control his social media posts if those statements would enable Tesla’s share price.

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