Tesla stock pared early gains Wednesday after Elon Musk appeared to concede a Twitter election defeat, and on reports that Tesla implemented a hiring freeze and warned of pending layoffs. Musk pledged via Tweet on Tuesday to step down as head of social media site Twitter "as soon as I find someone foolish enough to take the job!"
The Tesla chief executive, also the founder and CEO of aerospace innovator SpaceX, ran a Twitter poll on Sunday, asking users to weigh in on whether he should step down as head of the social media site. Musk also said he would abide by the results of the survey.
In the final result, 57.5% of more than 17.5 million voters called for his exit.
Musk bought Twitter in a contested $44 billion deal in October. He quickly shook up management and staff throughout the company's workforce, eliminating about half of Twitter's 7,500 personnel.
In addition, he reinstated accounts of controversial figures including former President Donald Trump and Kanye West, and paused accounts of several journalists who had been covering matters related to Musk himself.
Tesla Stock And Hiring Freeze
EV industry journal Electrek reported Wednesday that Tesla had informed employees of a hiring freeze, and warned of another round of layoffs after the start of the year. Electrek cited unnamed sources.
The move appeared to follow up on a request from Musk in June that the company pause hiring and prepare to cut 10% of its workforce. Musk cited economic conditions and outlook.
The pause in hiring raises questions about staffing rapidly expanding portions of the business, including new and expanded manufacturing sites for both autos and batteries. Tesla has faced increased scrutiny over its demand and outlook, despite reaching record sales in November.
Who Will Lead Twitter?
The story has received unremitting media coverage at least partly because of its use as a public resource. Journalists have broadly embraced Twitter as a fundamental reporting tool.
It has also been used globally as a means of organizing political and social activist movements. This has led to governments in countries including China, India, Iran, Nigeria and North Korea either banning the site or strictly censoring its use.
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Musk said in late November that Twitter's primary constituency was outside the U.S. He pointed to Japan, which has about a third the population of the U.S., but roughly the same number of daily active Twitter users.
Names floated as possible candidates to head Twitter include Sheryl Sandberg and Mike Schroepfer, former chief operating officer and ex-chief technology officer, respectively, at Facebook/Meta Platforms. Twitter founder and prior CEO Jack Dorsey has made clear he has no interest in returning to the role.
Investors Grumble As Shares Slide
Meanwhile, Tesla stock investors have grown increasingly frustrated with the Musk's investment — both in time and capital — at the social media site. Gary Black, whose Future Fund owns $50 million in Tesla shares according to the Wall Street Journal, tweeted on Dec. 12 that "there is no TSLA CEO today."
In addition, Musk sold a reported $7.5 billion worth of Tesla stock since closing the Twitter deal.
Tesla stock is down 48% since Oct. 1, with a year-to-date loss of 61%. Trading volume has been enormous during Tesla's recent losses, pointing to institutional investors exiting positions in the stock.
Meanwhile, Bloomberg reported that exchange traded funds owned by Cathie Woods' Ark Investment Management bought more than 445,000 Tesla shares since Oct. 3. The buys mark Ark's first net increase in Tesla stock, following a six-quarter pause, Bloomberg said.
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