Wall Street Downgrades Tesla's Rating Over Musk's Antics

Elon Musk’s management of Twitter, including the banning of multiple journalists, has “severely damaged” market sentiment around Tesla, and risks sparking a backlash from advertisers and consumers, a Wall Street analyst warned, Matt Egan reported for CNN.

Photo Insert: The Semi eTruck is but one of many of Tesla's delayed deliveries.

Oppenheimer & Co. downgraded its rating on Tesla, where Musk is the CEO, solely because of risks posed by the billionaire’s ownership and management of Twitter.

“We believe Mr. Musk is increasingly isolated as the steward of Twitter’s finances with his user management on the platform. We see potential for a negative feedback loop from departure of Twitter advertisers and users,” Oppenheimer analyst Colin Rusch wrote to clients.

An exodus of advertisers will only further erode Twitter’s finances and force Musk to unload even more Tesla stock to cover the cash hole, the firm wrote. Oppenheimer specifically cited Twitter’s decision last week to ban several journalists, including CNN’s Donie O’Sullivan, as a catalyst for the downgrade.

As CNN previously reported, Musk offered several journalists he banned from Twitter the option to return if they deleted the tweets he falsely claimed shared his “exact-real-time location.”

Rusch, the Oppenheimer analyst, said the “inconsistent standards application” for Twitter users has helped create a “broad public backlash” against Musk that will in turn hurt Tesla.

“We believe banning journalists without consistent defensible standards or clear communication in an environment where many people believe free speech is at risk is too much for a majority of consumers to continue supporting Mr. Musk/TSLA, particularly people ideologically aligned with climate change mitigation,” Rusch wrote.

In other words, Musk’s antics are bad for business, even Tesla’s business. Tesla shares have plunged by about 58% since Musk disclosed his stake in Twitter.

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