Yahoo Finance Live anchors discuss the decline in stock for Twitter following Elon Musk’s focus on Twitter.

Video Transcript

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JULIE HYMAN: Number three this morning, Tesla-- it's seen a major decline in its stock price since CEO Elon Musk took the reins at Twitter on October 27. Stock is down 28% since that deal closed. And it's falling again this morning after Goldman Sachs cut its price target on the company by almost a quarter, to $235, down from a prior target of $305. By various metrics, the stock is now trading at its lowest valuation ever, depending on how you look at it here.

And Elon Musk is no longer the richest man in the world. That's Bernard Arnault of LVMH. So all of this happening in the past few days with this latest leg down for Tesla.

BRIAN SOZZI: And really, I would say a lot of analysts, outside of our friend of the show, Dan Ives, have been, I would say, tepid or scared to make a strong call on Elon Musk and Tesla as a result of everything he's doing at Twitter. But here's Goldman really coming out here, not slamming it, but really raising the question a lot of investors have been wondering. What happens if he is, in fact, distracted? How do these next couple of quarters look like for Tesla?

Goldman noting this has now become-- Tesla's brand has become more polarizing because of Musk and what he's doing at Twitter. And they see that now as an increasing risk to the stock.

BRAD SMITH: So should Elon Musk even still be the, if you will, chief marketing officer by de facto basis because of how much his personal brand has been annexed to the brand of Tesla? And that's exactly what it had been for so long. We had looked at stock price reactions even when the SEC had their spat with Elon Musk because of the tweet going private, funding secured, and then the ramifications that came there afterwards, because there was a thought about what happens to Tesla if Elon Musk is not there?

Now you're looking at a different scenario. What happens for Tesla if Elon Musk is not there? Does this become a car company, an automotive company, or just a power company that is able to now relinquish itself of any of the sideshow that's taking place and perhaps have a more concerted focus around producing vehicles, around expansion geographically, and just continuing to add on to the perception that it's been able to take on thus far, at least in revolutionizing what the EV space looks like?

BRIAN SOZZI: He's not going anywhere. He owns Twitter. I mean, he owns Twitter. But at what point, if you're Tesla's board and you've watched almost $280 billion in market cap wiped off the stock this year, at what point do these friends-- does this friendly Musk board over at Tesla say, you know what, Elon, it's time to appoint your successor.

You want to focus on Twitter. You want to focus on turning this company around. Maybe you should. But we need an operator who can devote 120% of the time on executing on these plans you have laid out for this brand.

JULIE HYMAN: Meanwhile, there's reporting this morning that over at Twitter, Musk is refusing to pay rent on some of the properties. He's refusing to pay for private charter flights that occurred during the week of his takeover and sort of gearing up for legal battles over these various items. And how does that feed back into Tesla?

Well, that Goldman call that I mentioned this morning-- they're still buy rated on Tesla, by the way-- they talk a little bit about Twitter. The call mostly seems to be about supply and demand, that the Goldman analysts are looking at 420,000 deliveries in the fourth quarter of 2022, which is a lowering of their forecast. And at the same time, they talk about Tesla's brand becoming more polarizing.

They think they still have-- they think it still has significant value because of the company's leadership position. But, obviously, they are watching it. And more investors and analysts are watching the relationship between the two and the effect that the sort of feedback loop from the Twitter ownership to the reputation of Tesla.

BRAD SMITH: Even more than them not paying rent, apparently he's now going to be auctioning off some items, furniture from Twitter's headquarters as well, which is just another wrinkle in--

BRIAN SOZZI: Good for him, clamping down on cost there. Who really knows what rates those rents were signed, top of the market when Twitter offices were full. Good for Elon here. Good for--

JULIE HYMAN: Good for Elon for just saying, I'm not going to pay?

BRIAN SOZZI: Yeah, maybe he needs to renegotiate these rent releases.

JULIE HYMAN: Then you renegotiate. You don't just say, I'm not paying rent.

BRIAN SOZZI: That's how he is.

BRAD SMITH: You don't walk in with a kitchen sink.

BRIAN SOZZI: I don't say I agree with it, but he has to probably bring down the costs.

JULIE HYMAN: You just said, "good for him."

BRIAN SOZZI: Good for him on thinking of a way to bring down the costs in this business. They've been high, Julie, for since the company has been founded. They have lost tons and tons of money. And it starts with decisions on how much they're going to pay for rent. As small as it might seem, that's an important thing.

BRAD SMITH: All right. We'll see how much they make from selling 800 items, including--

BRIAN SOZZI: I've been waiting all morning to say that.

BRAD SMITH: --@-shaped sculptures at Twitter.

BRIAN SOZZI: Now I'm done.