Tesla stock fell. Are Meta’s sons to blame?

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Tesla investors’ Twitter headaches may return thanks to the Threads microblogging app launched by Meta Platforms. Chandan Khanna/AFP via Getty Images

Tesla stock fell on Monday, while shares of Ford Motor, General Motors and Rivian Automotive all rose. It’s a bit curious. Could MetaPlatforms threads be to blame?

Tesla stock (ticker: TSLA) fell 1.8%, while the S&P 500 and Nasdaq Composite both rose 0.2%. Shares of the other three automakers rose about 1.3% on average.

Of course, it’s only one day and that doesn’t mean anything. But there was one thing that may have led to Tesla’s underperformance. The reason would be that Tesla investors know the worst kind of DJ Vu.

Twitter could have done it. Specifically, Meta Platforms (ticker: META) built by Twitter competitor Threads may be responsible.

Ironically, the CEO of Cloudflare (NET) tweeted on Sunday that Twitter traffic [is] tanking. The tweet included a graph showing the Twitter domain’s rankings down about nine places since the start of the year. Google is the number one domain on the World Wide Web, according to Cloudflare. Twitter registered today at number 37. It started the year at around 32, according to Princes’ chart.

The discussions are said to be one of the reasons for the recent drop in traffic. The Metas microblogging app now has more than 100 million users, an impressive number considering the app went live only a few days ago.

It’s a reasonable question to ask why all of this matters to Tesla. The issue comes down to the impact on Twitter’s finances. Tesla CEO Elon Musk has sold shiploads of his Tesla shares to raise cash to buy Twitter and fund operations in 2022.

Nobody likes to see the CEO of a company he owns sell big blocks of shares. And even though investors believe in Musk’s commitment to Tesla, no one likes to buy a company’s stock ahead of a stock sell-off. The sales have weighed on Tesla investor sentiment for months.

The overhang appeared to lift in late December when Musk said there would be no more stock sales for 18 to 24 months. There’s always a lot going on with Tesla shares, but shares bottomed shortly after its announcement in early January at around $102 apiece. Tesla stock traded above $284 last week.

Investors want to think about electric vehicle deliveries and profit margins, not how Twitter is doing compared to Threads. As for what Tesla investors should do about all of this, the answer is probably nothing. They should just watch to see if Threads has a meaningful impact on Twitter’s financial performance.

Tesla, Twitter and Musk did not respond to a request for comment on potential Tesla stock sales. Investors likely won’t be notified if Musk has to sell more Tesla shares. They will only have to react to a sale if it occurs.

Write to Al Root at [email protected]

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