Tesla (TSLA) stock investors may have a new ally on Capitol Hill. Since CEO Elon Musk finalized his takeover of Twitter, he has been directing most of his attention to the social media company. In turn, TSLA stock has continued to fall.
As Musk has offloaded shares, Tesla’s value has plunged by $700 billion in value per CBS, leaving investors feeling abandoned. Recently, though, Senator Elizabeth Warren penned a letter to Tesla’s board, highlighting the legal problems that Musk’s actions may pose.
As Warren sees it, there is cause to consider whether Musk has misappropriated resources and created multiple conflicts of interest. As a result, these actions are harming the electric vehicle (EV) leader and pushing down shares. The New York Times reports:
“Ms. Warren also suggested the possibility of Mr. Musk intentionally shortchanging either Twitter or Tesla to benefit the other, including Twitter potentially overcharging Tesla for ads or tweaking the social network’s algorithms to benefit the carmaker.”
TSLA Stock Post Musk’s Twitter Takeover
This isn’t the first time Warren has shined a light on Elon Musk. In March 2022, Warren named Musk as an example of a billionaire who should pay higher taxes. Some agreed with that, others did not. But as for Warren’s more recent comments, numbers don’t lie. When it comes to TSLA stock, shares have fallen 37% since Oct. 27, which is when Musk assumed control of Twitter.
As of this writing, TSLA stock is down more than 15% for the month. Multiple Wall Street analysts have also slashed their TSLA stock price targets as concern for the company rises. Even longtime Tesla bull Dan Ives of Wedbush recently described the situation as a “train wreck.”
Musk quickly responded to Warren’s letter via Twitter with some remarks of his own:
The United States has definitely been harmed by having her as a senator lol
— Elon Musk (@elonmusk) December 20, 2022
Musk did not elaborate as to how Warren’s policies have harmed the United States, nor did he respond to the specific claims in the letter. At the end of the day, though, Warren’s assessment of Tesla may be correct, considering the downward trajectory of TSLA stock.
Will Musk Step Down?
As noted, TSLA stock has been on a downward spiral ever since Musk took the helm of Twitter, costing investors money and compelling them to sell shares to avoid further losses. The fact that TSLA stock recently popped when Musk ran a poll asking if he should step down from Twitter is highly telling.
What Musk will do next remains to be seen. InvestorPlace’s Shrey Dua reports that the hunt for a new CEO has begun, although Musk seems skeptical that one can be found. With Musk’s unpredictable nature, nothing is certain.
Even if Elon Musk does decide to shift his focus back to Tesla, the company will have a lot of ground to make up. While it’s unclear how Tesla’s board will respond to Warren’s letter, investors are still unhappy with how the CEO has handled his responsibilities since the Twitter takeover. Senator Warren will likely have considerable support from the TSLA stock investors who she described as being at risk.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.