But any such stock buyback by Tesla would seem to be washed out by the potential for a similar amount of stock sales by Musk. What’s worse, according to Ives, is that Musk’s deal to buy Twitter isn’t a good one based on its current price tag.
“The $44 billion Twitter price tag is simply a train wreck for an asset that we peg fair value in the $30 billion range best case in the midst of Everest-like uphill growth challenges,” Ives said. Musk agrees, saying on Wednesday that he is “obviously” overpaying for the company.
Recent reports suggest Musk could cut down Twitter’s headcount by as much as 75% once he takes over the social platform, but Ives is skeptical that such deep cuts would make the deal any better.
“Clearly, massive headcount cuts and expense controls need to take place on a leveraged $44 billion deal and Twitter is long overdue for expense reductions given the lack of growth. However, Musk cannot cut his way to growth with Twitter and a number in the 75% zip code would be way too aggressive in our opinion out of the gates and potentially set back this core platform for years,” Ives said.
