Billionaire Elon Musk is known to profitably juggle several businesses simultaneously. At the same time, he also has the knack for drawing the most attention and criticism for his thoughts and actions. As per the latest report from Bloomberg, the Biden administration is mulling over investigating Musk’s several business ventures, citing national security reasons.
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Musk’s Twitter Buyout May Be Complete Soon
Twitter’s (NYSE:TWTR) acquisition, one of Musk’s most talked-about deals, is anticipated to close by October 27. However, Musk’s $44 billion deal involves funding from a few foreign investors, which is viewed with discernment by the officials. The administration is also considering the involvement of the Committee on Foreign Investment in the United States, or CFIUS, to review the buyout, Bloomberg added.
On the other hand, the Washington Post reported that Musk is looking to lay off about 75% of Twitter’s employees after the purchase, as quoted by other investors. Notably, Musk recently commented that he and the other investors were “overpaying” for the Twitter deal but saw “incredible potential” in the microblogging site’s future. If true, Twitter’s current employee strength of 7,500 would be reduced to a mere 2,000 shortly.
Amid the lingering buyout, the Twitter stock has a Hold consensus rating, on TipRanks. This is based on one Buy versus 13 Holds. The average Twitter price target is $47.60 implying 9.2% downside potential to current levels, far from the agreed-upon purchase price of $54.20 per share. Meanwhile, the stock has gained 22.9% so far this year.
Musk and SpaceX’s Satellite Services
Furthermore, officials also worry about Musk’s rocket company SpaceX and its satellite network Starlink. The report noted that the billionaire’s recent threat to stop the supply of internet services to war-torn Ukraine and his stance on Russia need to be scrutinized in light of national security.
On the contrary, the Pentagon is expected to accelerate its contracts with Musk’s SpaceX satellite services. Despite disputes on funding Starlink’s services in Ukraine, the Pentagon believes that SpaceX has superior capabilities compared to rivals and continues doing business with it.
Tesla’s Performance in an Economic Downturn
On the other hand, this week was full of excitement for shareholders and analysts as Musk’s electric vehicle (EV) company, Tesla (NASDAQ:TSLA), reported its third-quarter results. Tesla’s Q3 performance was marked by a sales miss and an earnings beat.
Meanwhile, Tesla will miss its 50% production jump target for 2022 owing to logistical constraints. Having said that, in the conference call, CEO Musk said that Tesla is “recession resilient” and added that the company is persistent with its production ramp-up and also signaled the possibility of a hefty share buyback.
Is Tesla Stock expected to Rise?
Despite falling 48.2% year-to-date, the average Tesla stock prediction for the next 12 months is $304.01. This implies 46.7% upside potential to current levels. Some of the most bullish analyst ratings on Tesla predict a price target of $436, which implies an impressive 110% upside potential. On TipRanks, analysts have a Moderate Buy consensus rating on TSLA stock based on 18 Buys, six Holds, and four Sells.
