After all the drama that was enacted, Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk finally wrapped up the Twitter, Inc. (NYSE:TWTR) deal on Monday. Amazon, Inc. (NASDAQ:AMZN) founder Jeff Bezos is raising concerns about Tesla's reliance on China as a market and its implication for Twitter with the new owner.
What Happened: Bezos questioned whether the Chinese government has gained a bit of leverage over Twitter following its deal to be acquired by Musk.
His query came while quote-tweeting New York Times reporter Mike Forsythe's observation on Musk's business links with China and Twitter's ban in China — which has been in place since 2009.
Bezos also answered himself by stating that the deal would mean more complexity for Tesla in China rather than the implication it has for Twitter's censorship. The billionaire also suggested that it remains to be seen how the scenario evolves but said Musk is good at "navigating this kind of complexity."
My own answer to this question is probably not. The more likely outcome in this regard is complexity in China for Tesla, rather than censorship at Twitter.
— Jeff Bezos (@JeffBezos) April 26, 2022
Related Link: Twitter CEO Says No Job Cuts Planned Until Elon Musk's $44B Takeover Closes
Why It's Important: Bezos and Musk share a not-so-cordial relationship and their rivalry dates back to 2002, when the latter launched his SpaceX business in direct competition with the former's Blue Origin, established two years earlier.
The rivalry is mostly centered around their spaceflight business and the two have taken potshots at each other on public platforms. Incidentally, Musk toppled Bezos as the world's richest person in early 2021.
Musk's net worth is currently at $257 billion compared to the $170 billion for the second-placed Bezos, according to the Bloomberg Billionaires Index.
Benzinga's Take: Bezos' observation about Musk's China dilemma is not without any merit. Tesla's China vehicle deliveries accounted for about 15% of its total sales in 2021. The company has a sprawling factory in Shanghai with an annual production capacity of about 60,000 units. China also confers margin advantage to Tesla, as vehicles made at Giga Shanghai carry a higher margin than those manufactured elsewhere due to low labor costs.
Musk, even if not by volition, has to maintain a cordial relationship with the communist regime in China. It's unlikely that Musk will want to rub the government in a wrong way, going by the way the regulators in the country have hounded even home-grown high-profile tech companies for not dancing to its tunes.
Price Action: Tesla stock was advancing 0.20% to $999.99 in premarket trading on Tuesday, according to Benzinga Pro data, after Monday's 5.66% jump. Twitter shares surged 0.54% to $51.98.
