Tesla stock closes lower after Elon Musk named new Twitter CEO

The Yahoo Finance Live team discusses a drop in Tesla shares after Twitter CEO Elon Musk decided on the new chief executive for the social media platform, amid Tesla model recalls overseas and price changes.

Video transcript

AKIKO FUJITO: And, Seana, one of the big stocks in focus today, shares of Tesla. Let's take a look at how they closed the day today because a number of headlines driving the moves there. Down about 2%-- 2.4% let's say-- after Elon Musk tapped Linda Yaccarino to run Twitter. This comes at a crucial moment for the EV maker as the China recall, dwindling US demand, and an EV pricing war putting pressure on the stock.

It's important I guess, Seana, to kind of differentiate all of those. There's obviously the Twitter news that came out. The expectation here or the hope, I would say, among Tesla investors is that that allows Elon Musk to focus a little more on Tesla.

We heard from Ross Gerber over at Gerber Kawasaki earlier that the recall, the 1 million cars being recalled over in China because of braking issues, he thinks that's a little more smaller because it is about software updates, not necessarily a wholesale recall as he describes it.

The pricing war, which I know you've been watching closely, to me is one to continue to watch. We did see Tesla hike prices for all their models except the Model 3 yet again. But there's a lot of competitors in the market right now.

SEANA SMITH: There certainly are a lot of competitors out there, and I think Tesla's kind of struggling with the fact how low they want to bring prices in order to increase adoption versus that they want to keep them in check because of the pressure that we have simply seen on their margins this past quarter.

In terms of the analyst reaction, I think analysts are pretty split on this idea. We heard from Dan Ives of Wedbush in the past that it's short-term pain for long-term gain, and I think others a little bit more skeptical just in terms of what exactly this means for Tesla's bottom line going forward.

But Ross Gerber, he was pretty optimistic about the new CEO that was named at Twitter, what exactly that means for Elon Musk at Tesla. He was very encouraged by it, saying that he believes it is going to free him up just a bit. I think to the degree of that is what people are debating right now.