While Elon Musk scrambles to make Twitter financially viable just weeks after his purchase became official, some investors are increasingly skeptical that the serial entrepreneur can balance the added workload.
One of the trickledown effects is that long-time Tesla bull Wedbush Securities is taking Musk's electric vehicle company off of its top investment ideas list, analyst Dan Ives wrote in a note Thursday morning.
The analyst wrote that while the long-term bull case remains unchanged, Musk's "Twitter antics" have put the stock "deep in the investor penalty box until deliveries hit in early January and we get a better sense of the 2023 delivery/production trajectory."
In the meantime, Tesla shares are feeling the pressure. As the once-fawning analyst pointed out, the stock was down more than 25 percent since the acquisition, and has dropped multiple times just this week.
Ives added: "More worrying is that this Twitter 'money pit' situation will never end and continue to take up money, time, and attention from Musk instead that could be focused on Tesla."
Other investors have echoed the critique that Musk's takeover of Twitter is a distraction from the arguably more important task of keeping Tesla on track.
"You can tell they're stalling, and I don't know if it's because Elon isn't devoting enough time to those projects, but there's not the same excitement around Tesla these days," Taylor Ogan, CEO of Snow Bull Capital, told Cheddar News.
While very few people probably know exactly how Musk splits his time, Ogan said the neglect is self-evident. He pointed to the fact that Tesla hasn't announced a new product in years, and that its vehicle line-up is also getting stale just as competition is starting to heat up. In addition, a number of longer-term, innovation-based projects, including self-driving cars, have ground to a halt.
Pinning down where the problem lies is difficult, however, as there have been very few executives in the past or present who have juggled so many companies.
"You can't compare it to anything," Ogan said. "There's never been a CEO who is representing multiple companies like this. It's completely unprecedented."
He added that there is also no precedent for a CEO who is so identified with his company and its product, which has presented a problem for the brand as Musk has become more controversial and partisan in his public persona.
"I own a Tesla, and it's getting to the point where it's almost embarrassing to drive a Tesla, which is the opposite of what it was two, three years ago," Ogan said.
In a more technical sense, this dynamic elevates what's called "key person risk," or the risk that an individual person presents to a business's operations. Usually this refers to the risk of a person dying or being absent for an extended period. In Musk's case, it could be a unilateral decision (like buying a struggling social media company) or a controversial tweet (like telling people to vote Republican).
For Tesla investors, the Twitter purchase is jeopardizing Musk's whole empire.
"Tesla is Musk," wrote Ives. "Elon Musk has become the richest person in the world because of Tesla. Tesla is the golden child of his empire and has transformed the auto world over the past decade similar down the path of Apple's iPhone global impact."