Tesla's stock is suffering from Musk's Twitter takeover, Morgan Stanley survey of investors finds

Published Tue, Nov 29 202212:46 PM ESTUpdated Thu, Dec 22 20226:24 PM EST

Elon Musk's involvement in Twitter hasn't been good for Tesla 's stock, according to a Morgan Stanley survey of institutional investors and industry experts. Musk, CEO of Tesla, took over Twitter in late October after a public battle over whether he would follow through with his agreement to buy the social media platform. He's since been making headlines over his mass firing of employees, botched rollout of paid verifications and feud with Apple , among other things. Meanwhile, Tesla has lost about $500 billion of market cap in the past 60 days, while the S & P 500 is up about 3% in the same time period, Morgan Stanley analyst Adam Jonas wrote in a note Tuesday. The losses spurred the firm to survey its clients about the Twitter impact. Nearly 75% of those surveyed by the firm believe the Twitter situation has accounted for at least a significant portion of Tesla's recent share price underperformance, the survey showed. Some 40% believe it has accounted for half or more of the recent weakness, and 65% feel the Twitter acquisition will have a negative or slightly negative impact on Tesla's business going forward. Morgan Stanley received 43 responses to its Nov. 23 survey. Those results reinforce Jonas' view on Tesla. "We see the situation at Twitter potentially exposing Tesla to risks along a number of areas including: (a) consumer sentiment/demand, (b) commercial partnerships, (c) government relations/support; and (d) capital markets support," Jonas said. "While difficult to quantify, we believe there must be some form of sentiment 'circuit breaker' around the Twitter situation to calm investor concerns around Tesla." Jonas sees a window of buying opportunity near his $150 per share bear case, which is an 18% drop from Monday's close, though his current price target of $330 is 80% upside from Monday's close. "In a slowing economic environment, we believe Tesla's 'gap to competition' can potentially widen, particularly as EV prices pivot from inflationary to deflationary," he said. Tesla shares are down 48% year-to-date. — CNBC's Michael Bloom contributed reporting.