Elon Musk's selection of a new CEO for Twitter may remove a big distraction for the billionaire and allow him to focus more on Tesla Inc TSLA.O, which has been struggling with a drop in demand for its electric vehicles, analysts said.
Shares of the world's most valuable electric vehicle maker, which have gained 40% this year, rose about 2% in trading before the bell on Friday. The stock had its worst year in 2022, losing 65%, amid Musk's on-again, off-again offer for Twitter.
Tesla investors worried
Ever since Musk bought Twitter in a $44 billion deal, Tesla investors have been worried that he may not be able to give his full attention to the company, which is in a price war with upstarts and legacy automakers.
"This is a fractional positive for Tesla shareholders because he will likely spend a little bit more time on Tesla," said Gene Munster, Managing Partner at Deepwater Asset Management. "However, there are other things that are competing for his time."
Musk said on Thursday he had found a new CEO for Twitter, without naming the person. The Wall Street Journal reported that Comcast Corp CMCSA.O NBCUniversal executive Linda Yaccarino was in talks for the top role at the social media platform.
The billionaire said he would take on the role of chief technology officer at Twitter.
"Tesla investors are likely to celebrate this move too, with Musk's very hands-on approach at Twitter leading to concerns he had taken his eye off the ball at this EV giant," Hargreaves Lansdown analyst Sophie Lund-Yates said.
Although Twitter has taken much of Musk's time since its takeover, he still actively manages several other businesses such as SpaceX and Neuralink. Musk recently formed an AI company called TruthGPT to take on OpenAI's ChatGPT and Alphabet Inc's GOOGL.O Bard.
Musk's involvement with Twitter has been quite chaotic. He has slashed thousands of jobs at the social media company, fired its top executive team, including its CEO, and has made many changes to its policies and strategy to rely less on ads and more on subscription money.