Elon Musk — The Man Who Moves Markets

We can’t remember the last time Elon Musk wasn’t making headlines. His recent purchase of Twitter has seen him go from serial tweeter to Tweeter-in-Chief, Chief Twit and now Twitter Complaint Hotline Operator.

Elon’s Twitter purchase has potentially enhanced his ability to move markets in ways that others simply cannot. Today, we’ll cover his recent purchase, cover a few of his previous market-moving exploits, and look at what could be next. We’ll also update you on the key fundamental events of what looks like a relatively quiet week of trading.

A Pretty Tweet Deal

After months of back and forth, the South African multi-billionaire finally has his hands on the prize, purchasing Twitter for $44bn last week. On doing so, he immediately took up the post of CEO.

Following that, mass redundancies dominated the headlines with #TwitterLayoffs trending. Yoel Roth, head of Twitter’s trust and safety team, confirmed that the overall headcount was cut by roughly 50%. Ouch.

Bye Bye NYSE

The deal also ended Twitter’s 9-year run on the New York Stock Exchange, as of 28 October 2022, the company is no longer publicly traded. This now clears the way for Musk and his new management team to make whatever changes they like, without being concerned about shareholder opinions.

The reported changes that are coming include potentially charging users $20 per month to keep the blue ticks that indicate verified accounts. Musk also hinted that they would now purge accounts that had been inactive for more than a year.

3 Times Elon Musk Has Moved Markets

Let’s be honest, this guy has influenced the market way more than a handful of times(!), here are just five.

#1 That’s Gotta Hertz!

In 2021, Musk hinted that Hertz Global Holdings’ deal to buy 100,000 Teslas for its rental car fleet wasn’t quite over the line, downplaying the $4.2bn agreement. Tesla’s stock price then dropped by 3% the following day.

Source: Twitter

#2 Yo-yo-ing with Bitcoin

Musk’s relationship with bitcoin has been a complicated one. Fortunately (or not) for all of us, it’s also been very public. The bitcoin price chart below says it all really…

Source: Recode by Vox

Elon also impacted Dogecoin and Gamestop during the Gamestop/ Wall Street Bets saga. This is not exclusively through his own actions but through his army of crypto fans whose sheer volume are able to impact market movements.

Dogecoin fell 4.7% to $0.1179 this morning, amid high volatility after Elon Musk shared a picture of a Shiba Inu dog wearing Twitter’s branded t-shirt.

#3 Agreeing to buy Twitter, sending Tesla spiraling

This one seems quite funny now. But when Elon first stated that he felt that Twitter wasn’t achieving its potential he slapped in his bid to buy it earlier this year.

To finance the deal, he sold around $8.4 billion worth of his shares in Tesla. As a result, Tesla’s share price initially plummeted by 12 per cent.

TSLA, January-May,2022

Source: Google

The stock price didn’t exactly improve from that point onwards. It’s not entirely to do with the Twitter deal, of course, but TSLA stock is currently down by a crazy 48% YTD. It’s going to be interesting to see how Musk’s increasingly split focus impacts the value of Tesla stock going forward.

TSLA, YTD

Source: Google

What do you think?

Do you remember any other times Elon made waves in the markets? What’s your most/least favourite? Let us know what you think and why by tweeting us at @_contentworks.

Top fundamental events week commencing 07.11.22

The markets look pretty quiet this week. Here are all the events to look out for.

Monday

No major events are planned.

Tuesday

● AUD — Westpac Consumer Confidence Index (NOV)

Wednesday

● CNY — Inflation Rate YoY (OCT)

Thursday

● CNY — New Yuan Loans (OCT)

● USD — Core Inflation Rate YoY (OCT); Inflation Rate YoY (OCT)

Friday

● EUR — Inflation Rate YoY Final (OCT)

● GBP — GDP 3-Month Avg (SEP); GDP Growth Rate YoY Prel (Q3); GDP YoY (SEP)

● USD — Michigan Consumer Sentiment Prel (NOV)

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The Contentworks team