Does Musk support Trump?
According to the latest news, Bloomberg reported that billionaire and Tesla CEO Elon Musk has quietly donated to Trump. It is currently unclear how much money he paid, but insiders say the amount is huge. This marks that this billionaire has become increasingly outspoken about American politics over the past year, with the most obvious support for the Republican Party.
In addition, another news related to Musk has also attracted attention. There are reports that Musk's social media platform X (formerly known as "Twitter") is seeking to give up its large office space at its San Francisco headquarters, which will hit the struggling real estate market in San Francisco.
On Friday local time, Tesla, owned by Musk, rose nearly 3% to $248.23 per share, with a total market value of $791.7 billion.
Huge donation
Musk is the wealthiest person in the world, running electric car manufacturer Tesla, rocket manufacturer SpaceX, social media company X, and other companies. According to the latest ranking of Bloomberg Billionaires Index, Musk's net worth is $264 billion, ranking first in the world, which is $48 billion more than the second ranked Amazon founder Bezos. There are reports that the world's richest man donated a portion of his wealth to a group that supports Trump before the election.
On July 13th local time, according to Bloomberg, Musk has donated to a super political action committee supporting Trump's campaign, indicating that the world's richest man has made a big move to leave his mark in the US political arena.
According to reports, insiders revealed that Musk donated money to a low-key organization called America PAC. It is currently unclear how much money he paid, but insiders describe the amount as enormous. The next time the committee needs to disclose the donation list is July 15th.
At present, Musk has not responded to the news of donating to Trump, and Trump's campaign team has not commented. Before Musk paid out, Trump had already surpassed his competitor Biden in fundraising amount, as wealthy Wall Street and corporate funders stepped down one after another. At the same time, the catastrophic debate led Democratic donors to put away their check books, causing Biden's new sources of funding to gradually dry up.
Musk has not publicly endorsed any candidate for the 2024 election. He stated earlier this year that he estimated he would not provide funding for the campaigns of Trump or Biden. But now, his decision to open his wallet has created an opportunity for him to become an important Republican financier.
According to Reuters, Biden's campaign spokesperson James Singer said, "Musk knows Trump is a fool who will betray America. He will cut taxes while raising taxes on the middle class." Singh said in a statement, "Biden has been fighting against people like Musk throughout his career, fighting for the middle class, and that's why he will win in November
X headquarters suddenly
Elon Musk's social media company X (formerly known as "Twitter") hopes to give up its large office space at its San Francisco headquarters, which will further reduce the company's presence in the city and deal a blow to the struggling local real estate market.
According to the San Francisco Chronicle, this social media company has hired JLL to sublease 460000 square feet (42700 square meters) of office space at its headquarters at 1355 Market Street. Previously, the company sought to sublet approximately 330000 square feet of office space in the adjacent building.
A spokesperson for JLL confirmed that X company is giving up the "excess space" located at 1355 Market Street and all space adjacent to the building One Tenth St. He refused to disclose to what extent the company still plans to stay in this office building. According to the filing documents in 2020, before the COVID-19, the headquarters of the company called Twitter leased about 800000 square feet of space.
Derek Daniels, research director at real estate company Colliers, said, "This will be the largest sublet space in San Francisco." He added that X's subletting will drive the city's total sublet area to a "historic high of 9.8 million square feet set a year ago. With the shift towards remote work, the number of vacant office spaces in San Francisco has been increasing for four years, reaching a historic 37% in the last quarter.
The decision to push the headquarters office space to the market may be a sign of X's dissatisfaction with San Francisco or an internal dilemma for the company itself. Earlier, Musk criticized California's laws, regulations, taxes and policies on COVID-19. This billionaire often sharply criticizes street crime, homelessness, and what he sees as a decline in the quality of life in San Francisco.
Musk is not the only billionaire who is skeptical of San Francisco. According to Bloomberg, the vacancy rate of office buildings in the city is the highest among large metropolitan areas in the United States. The stock of Company X has been delisted and is no longer publicly traded, making its financial situation more difficult to track than in the past. However, the relocation of the office may be related to the social network under Musk's leadership.
In 2022, X Company was sold to Musk for $44 billion, initially raising questions about whether it would continue to root in San Francisco. In 2023, Musk will relocate his and his car company Tesla's headquarters from California to Texas.
The latest regulatory documents show that after Tesla CEO Elon Musk took over Twitter (now renamed X), the company's revenue significantly declined, mainly due to advertisers being scared away by Musk's aggressive measures. According to the latest documents submitted by X to regulatory authorities, X's revenue has indeed significantly decreased since Musk took over. In the first six months of 2023, which is also Musk's first full year since taking over X, X's revenue was $1.48 billion, a year-on-year decrease of nearly 40%. In addition, in the first quarter of 2023, X incurred a loss of $456 million. In contrast, the company's net profit for the first quarter of 2022 was $513 million.
Tesla's stock price rebounds after a sharp decline
Recently, the stock price of Tesla, a subsidiary of Musk, has fluctuated significantly.
During the period from June 25th to July 10th, with the concept of intelligent driving becoming a core hot topic and Tesla's second quarter delivery volume better than expected, Tesla's stock price rose for 11 consecutive trading days, with a market value increase of $260 billion to $839.6 billion, completely recovering all the losses since the beginning of the year.
On Thursday, July 11th, the news of Tesla's plan to delay the release of the Robotaxi from August to October caused Tesla's stock price to plummet by 8.44% and its daily market value to evaporate by nearly $70 billion. According to media reports, the decision to postpone the release of Robotaxi to October was based on the progress of the project and has not been publicly announced, but internal communication has already been conducted before. A source said that this week the design team was informed to redesign certain elements of the car.
On Friday local time, Tesla rose nearly 3% to $248.23 per share, and its total market value rebounded to $791.7 billion. On that day, UBS downgraded Tesla's rating from neutral to sell. However, Citigroup has raised Tesla's target price from $182 to $274.
UBS has downgraded Tesla's stock rating due to concerns that the company's stock price may "rise too much, too fast" due to optimism about its artificial intelligence plans. Analysts including Joseph Spark wrote in a report that 'if the market's enthusiasm for artificial intelligence weakens, this could affect Tesla's price to earnings ratio' and downgraded its rating from neutral to sell.
The above analyst stated that the downgrade is reasonable given the lack of visibility and the possibility of growth opportunities being realized (or not realized at all) over a longer period of time. They pointed out that the expected P/E ratio of the stock based on future one-year earnings exceeds 80 times. UBS's actions reflect growing concerns about the valuation of companies related to artificial intelligence technology, as evidenced by the sell-off of major US tech stocks on Thursday.
However, Citigroup has a different perspective. Despite a significant drop in Tesla's stock price on Thursday due to the delay of Robotaxi's launch event, Citigroup still raised its target price from $182 to $274 and maintained a neutral rating for the stock. Citigroup stated that Tesla's strong stock price increase has increased its reliance on upcoming electric vehicle products and artificial intelligence catalysts. The delivery performance in the second quarter is also encouraging. However, Citigroup believes that without new products and artificial intelligence catalysts, the core fundamentals of electric vehicles alone are unlikely to support a further significant increase in Tesla's stock price from here.
Citigroup has raised its valuation and price targets for Tesla, reflecting a more optimistic short-term sentiment, but the overall condition of the company remains neutral as the stock's performance depends on future product and technology developments.