Why Elon Musk’s Twitter takeover is bad for Tesla
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The Twitter farce of the past few months – is Elon Musk buying the platform or not? – hasn’t done Tesla’s share price any good. And now that Twitter has finally been acquired by Musk, Tesla’s problems are only getting worse. That’s why.
Investors don’t like uncertainty. That’s why the bizarre game between Elon Musk and Twitter has recently put Tesla’s share price under pressure. Musk announced he wanted to buy the social media platform for $44 billion, then made up excuses to get out of the deal, and later suddenly bought the whole thing.
Racism and hate speech on the rise on Twitter
Advertisers on Twitter are watching the cat from the tree. Audi and General Motors have temporarily stopped paying for advertising on the platform to see what Musk will do. He is laying off a large part of the workforce and has announced that he wants less strict moderation. In the past few days, the amount of hurtful, racist, and hate speech on Twitter has skyrocketed.
Elon Musk now owns five companies
Tesla stock price should rise after Twitter acquisition But in reality the opposite happened. The stock continued to fall. The Musk person has grown a lot with the Tesla brand, and now that he’s also CEO of Twitter, he oversees no fewer than five companies: The Boring Company, Neuralink, SpaceX, Tesla, and Twitter.
Two problems for Tesla over Twitter takeover
This is a problem in two ways. News channel CNBC reports that Musk has removed 50 engineers from the Autopilot team to examine Twitter’s software code. That’s not a bad thing in itself, but considering Musk has been promising for years that self-driving cars are coming, while Autopilot is far from perfect and under criminal investigation.
A country like China can now hold Tesla hostage
The second problem is that Tesla is hugely dependent on China. The Gigafactory in Shanghai is Tesla’s main factory, and the Chinese auto market accounts for a quarter of sales. Twitter, on the other hand, is regularly embroiled in a struggle with the Communist Party. And these interests do not mix.
According to the Bloomberg news agency, Twitter has shut down several Chinese channels that tried to influence the US midterm elections with fake news in recent months. It is almost certain that these channels are related to the Chinese government.
Security experts say Elon Musk made a big mistake by buying Twitter. A country like China can now hold Tesla hostage by restricting or licensing the manufacturer if Twitter doesn’t do what Xi Jinping and his party want.
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Source: Auto visie
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
