Elon Musk's Twitter obsession takes further toll on Tesla

Elon Musk is turning once again to his Tesla stock to fund his Twitter habit — and investors are getting frustrated.

Why it matters: The precipitous drop in Tesla's stock price illustrates the real-world consequences of Musk's decision to acquire Twitter, and then disrupt the company's operations, scaring off advertisers.

• Tesla's stock has lost nearly half of its value in the last three months, touching a new 52-week low of $153.28 yesterday.

Driving the news: Musk disclosed late Wednesday in a public filing that he sold another $3.58 billion in Tesla shares, bringing his total selloff this year to some $40 billion, per Reuters.

• It was a fears-come-true development for Tesla investors, who were anticipating Musk selling off more stock to prop up Twitter's sagging financial prospects, CFRA Research analyst Garrett Nelson told Axios on Nov. 30.
• Musk had publicly stated twice this year that he didn't plan to sell any more shares in Tesla, Axios' Rebecca Falconer reported.

The impact: The stock's longstanding immunity to operational concerns and the reality of fundamentals is in jeopardy.

• "When does it end?" Wedbush Securities analyst Dan Ives asked in a distressed-sounding research note. "[Musk's further selling of Tesla stock] remains the worry," he added, saying it's turned into "a train wreck situation" for Musk's empire.

Yes, but: At about $159 per share, Tesla still has a market capitalization of nearly half a trillion dollars, making it the most valuable automaker by a long shot.

• Tesla did not respond to a request for comment.

What we're watching: Whether disenchantment with Musk's handling of Twitter affects Tesla's underlying business.

• While Tesla's challenges are coming from multiple places, including growing competition in EVs, there is a growing chorus of suspicion that negative sentiment around Musk's own brand is among them.
• Data from consumer insights firm HundredX shows that the share of Tesla owners that say they're likely to buy another Tesla had fallen 10 percentage points last month from May, taking it 5 percentage points below the industry standard, Bloomberg reported.
• Sentiment about Tesla’s brand value turned more negative over the past few months, HundredX found, in addition to feelings about its quality, reliability and service.

What they're saying: "While we remain bullish on the long term thesis for Tesla and believe the stock is oversold, Musk continues to throw gasoline in the burning fire around the Tesla story by selling more stock and creating Tesla brand deterioration through his actions on Twitter," Ives said.