Share this @internewscast.com

It is easy to waste time on Twitter. TWTR -0.18%

The risk of Elon Musk selling Tesla TSLA -0.77% stock to fund his purchase of the social-media platform, which spooked investors in the electric-car maker Tuesday, may already have played out. The risk that his involvement in another high-profile company saps time he might spend on the next big thing at Tesla, while less concrete, may be harder to put to rest.

Tesla stock rose 5% Friday after its chief executive officer tweeted late Thursday that he didn’t plan to sell any more shares. Regulatory filings showed a total of $8.5 billion worth of disposals on Tuesday through Thursday, and the stock fell 12% on Tuesday amid very high turnover.

The situation is complex given how Mr. Musk has also borrowed against Tesla shares, including to fund the Twitter deal, but investors can at least stop worrying about big near-term sales from the company’s largest shareholder.

The other worry for Tesla investors is vague but important: Tesla is a so-called story stock and Mr. Musk is by far the most important narrator. The electric-vehicle pioneer isn’t valued like other car makers, even accounting for its rapid growth and recent run of profitability.

One very rough way to quantify what might be termed the Musk premium is through so-called PEG ratios that adjust price/earnings multiples for growth rates, to more easily compare slow-growing companies with fast-growing ones. Using FactSet consensus analyst estimates, Tesla’s forward PE ratio equates to 3.3 times its expected annual growth rate through 2025. For best-in-class peer Toyota, the multiple is 1.5 times, and for General Motors and Ford it is below one.

Twitter will become a private company if Elon Musk’s $44 billion takeover bid is approved. The move would allow Musk to make changes to the site. WSJ’s Dan Gallagher explains Musk’s proposed changes and the challenges he might face enacting them. Illustration: Jordan Kranse

In other words, more than half of Tesla’s valuation seems to be about things other than the company’s suddenly successful car-manufacturing business. This could be the promise of its driverless robotaxis, which Mr. Musk hopes to start making in 2024, or its robot project Optimus, which he said last week would ultimately be worth more than both the car business and the driverless-car operation. The company seems to have enough investors that take him at his word.

The question is what they will think if he starts saying less about Tesla and more about Twitter. Of course, there is no immediate suggestion that Mr. Musk will start to neglect the car maker, which even after the share sales will account for the largest chunk of his wealth by some distance. His leadership of space-exploration company SpaceX shows his unusual capacity to multitask. But just how much vision does one man have, and in how many different directions can it be focused?

Tesla investors have long benefited from Mr. Musk’s freewheeling spirit, but there could be another side to the coin.

Write to Stephen Wilmot at stephen.wilmot@wsj.com

Elon Musk and Twitter

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source: WSJ

Share this @internewscast.com
You May Also Like

Millions of laundry, cleaning products recalled due to bacteria risk

The Laundress is recalling more than eight million laundry and cleaning products…

Eugene Volokh, Rumble Seek to Block New York Hate Speech Law

New York State Attorney General Letitia James speaks during a press conference…

Sheffield United Q&A: Ndiaye future, next season's kit deal, ticket prices, takeover and hotel

Welcome to Yorkshire Live’s weekly Sheffield United Q&A, talking all things Blades

Door County Candle Company raises money for Ukraine

DOOR COUNTY, Wis. () — A candle company in Wisconsin is using…

Biden pushes for South Carolina to lead presidential primaries

() — President Joe Biden announced he’s in support of a shakeup…

Man convicted of killing girlfriend in 2018 could face death penalty

JACKSONVILLE, Fla. – The penalty phase for Eric Lamar Jackson, who’s convicted…

Neighbor of victims submits DNA to police on his own

() — Jeremy Reagan, a neighbor of the Idaho murder victims, tells Ashleigh…

USA TODAY didn’t report 3,000 Neuralink monkey deaths

Fake screenshots falsely claim the newspaper published an article saying animal testing…

Man found fatally shot in home on Jacksonville’s Westside

JACKSONVILLE, Fla. – The Jacksonville Sheriff’s Office is investigating after a man,…

Dean at Ribault High School charged with child abuse, police say

An arrest report from the Jacksonville Sheriff’s Office indicates that Greene and…

Darren Moore opens up about Sheffield Wednesday's January transfer window plans

The Owls are heading into the busy winter period full of form…

Boulder police ID driver accused of hit-and-run that injured 14-year-old boy

BOULDER, Colo. — Boulder police have identified a driver accused of hitting…