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How Elon Musk's Twitter buyout may impact Tesla stock

Autos correspondent Pras Subramanian outlines how Tesla CEO Elon Musk's purchase of Twitter may affect the EV developer, in addition to looking at Ford's production output in the third quarter.

Video Transcript

DAVE BRIGGS: Continue to follow that breaking news of Elon Musk reversing course and deciding to follow through on plans to buy Twitter at $54.20 per share. How will this impact Tesla? Senior Autos Reporter Pras Subramanian here with more. The stock was really neutral all day and then popped up 2.6%, nearing 3% at the moment-- presumably, no negative impact, or at least in the eyes of investors, Pras.

PRAS SUBRAMANIAN: There might be a little bit of an overhang being removed because Musk did have some shares pledged for the sale. So that was pledged, he's probably going to sell. I think debt financing around $13 billion-- so he needs to recoup or get the rest of that money in place to make this $44 billion deal. So there's that financial element for the stock.

So I think it's-- you just saw right there a little effect, but it should be going away. I think the big picture is, what is Musk going to do now, right, with Twitter? Is he going to be-- how hands-on is he going to be?

Is he going to say, hey, I want to be chairman of the board? Or, hey, I'm going to be hands-off, and be like Jeff Bezos, and let the-- I'll install my people and let that company run itself. I don't think he's that kind of guy.

He kind of has his hands in every little pot here. So the question is, how far does he spread himself out? And we just saw over the weekend Tesla's Q3 numbers came out, delivery numbers, a record quarter, but below what Wall Street wanted. And there's concerns that demand might be drying up because of the economy.

So is Elon going to be too spread out, or spread too thin? That's an issue that we'll probably find out more about.

SEANA SMITH: Yeah, and is a worry here for investors, especially at a time like now. You mentioned the fact that there is some worry out there that the economy is starting to weaken. Of course, there's the production issues as well as supply chain issues that Tesla did hint at.

We also got numbers from Ford and GM this week. And when you take a look at those, they actually look pretty strong. I guess, what do you make of just where the auto industry stands with its production issues and what we should be expecting to see over the coming quarters?

PRAS SUBRAMANIAN: My big takeaway is that what we've seen from Ford and GM in particular, strong numbers, they're executing here. They're actually able to get the materials they need and they're actually building these cars. On the flip side, you have companies like Honda, Nissan, Stellantis down a lot. They can't build these cars.

Stellantis said they think that chip crisis goes until 2023 for them. So they're having problems getting the necessary materials they need to make these cars. So I think it's really a tale of two execution stories-- you know, GM and Ford doing it, and even Tesla to a certain point doing it more so than others.

SEANA SMITH: Yeah, it will be interesting to see how it all shakes out because, again, worry still sticking around with some of these larger auto giants just in terms of when we're going to see those supply chain issues be resolved. So we'll have to wait and see about that. But, Pras, thanks so much for hopping on here and stopping by.