Do. Or Do Not. There is No Try.
That's how Elon Musk approaches all his businesses, and none more so than his managing of Twitter 🐦 right now.
For Elon's recent selling of Tesla shares, there might just be two reasons:
1. To pay a portion of $44 billion Twitter acquisition, or
2. To have cash for Twitter running costs in the near to middle term
First reason doesn't seem so, as Musk had already sold shares in Aug this year and explicitly mentioned it was to fund the acquisition. There was no further news that he needed more cash with loans secured.
The second reason is more plausible. Revenue is forecasted to drop dramatically, as executives and advertisers flee Twitter. Elon said that the company might face bankruptcy next year, and that's why he sold shares. While making changes to increase revenue, free cashflow is essential to keep the company afloat during a downturn.
In selling his shares at such low prices, Elon is taking a "loss". This hurts Elon more than Tesla investors as he could have sold at higher prices, but instead sacrificed his money to run Twitter.
This is Elon Musk.
He must have watched StarWars, in particular "The Empire Strikes Back" when Luke was training to be a Jedi. It must be done with full commitment to succeed, no half-hearted effort.
That was the same story for Tesla's and SpaceX's survival back in 2008, as Elon spent every cent he had to starve off bankruptcy for his two companies (not just one).
Bottom fishing or Short??
For Tesla investors, unless you are looking to cash out now, this is just volatility. Instead, if you believe in Tesla's growth, Elon is effectively selling shares at a discount to you. That's the arguement for bottom fishing. Forward PE is "only" at 35 for a company that is growing 40% annually (I dare not say 50%).
Conversely, I would say that Tesla's current valuation is it's Achilles heel. Current PE ratio at 60 is so high compared to tech giants e.g. Apple, Microsoft, Alphabet.
Moreover, Twitter seems to be a distraction for Elon from Tesla right now. Whether this has a knockon effect and retards Tesla's growth is too early to say.
All we know is that Elon Musk has been there, and done that. Everyone expected him to fail in rockets and EVs when he only had a PayPal resume.
After achieving the "impossible", now everyone's backing him to fail yet again. This is possible, but less probable, I think.
To summarise, let's focus on Tesla growth, keep an eye on Twitter's news and hope for a Fed pivot soon. [Happy]
$Tesla Motors(TSLA)$
@TigerStars @Tiger_chat @MillionaireTiger @CaptainTiger
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