Only part of the plunge in Tesla’s stock market value can be pinned on Elon Musk’s misadventure with Twitter. Yes, selling a few tens of billions of dollars-worth of Tesla stock – far more than he signalled at the outset – to fund the purchase was bound to dampen the mood among investors in the back seat. And, yes, the distraction factor is serious; Tesla’s non-executive directors should be screaming at the boss to get back to the day job.
But the main cause of Tesla’s decline from a $1.2tn valuation to today’s £350bn is surely very simple: the stock was ludicrously overpriced in the first place. Investors were required to believe that revenues could keep rocketing for years and competitors’ attempts to catch up with electric vehicles would barely affect Tesla’s profit margins.
