In this case the correlation is stronger than normal though. From Matt Levine's newsletter yesterday:

> The shareholders

> Twitter’s biggest shareholders, according to Bloomberg’s holders page, are the Vanguard Group, Elon Musk, Morgan Stanley, BlackRock Inc., State Street Corp., Aristotle Capital Management, Fidelity, Jack Dorsey, ClearBridge LLC and Geode Capital Management. Tesla Inc.’s biggest shareholders are Elon Musk, Vanguard, BlackRock, Capital Group, State Street Corp., Larry Ellison, Geode and Fidelity. Tesla is a much bigger company than Twitter. Vanguard’s Tesla stake is worth about $62.5 billion, versus about $4.5 billion for its Twitter stake.[6] Morgan Stanley’s 8.8% stake in Twitter is worth about $3.6 billion at Musk’s deal price, versus $3.7 billion for its 0.36% stake in Tesla. It seems clear that a majority of Twitter’s stock is owned by shareholders who own more Tesla stock.

> Many of those shareholders are a bit odd, either the big index-fund companies or Elon Musk, who have their own agendas. But if you were a fundamental equity manager and you owned, say, a big $1 billion chunk of Twitter and a small $5 billion chunk of Tesla, what would you think about this deal? I don’t know! This deal will make you, say, a 40% return ($400 million-ish) on your Twitter stock. But it might cost you something on your Tesla stock. Tesla is down about 8% since Musk announced his stake in Twitter. (Which cost you about the $400 million you made on Twitter.) If Musk succeeds in buying Twitter, then (1) he will have to sell billions of dollars’ worth of Tesla stock to pay his portion of the check, driving down the stock price, (2) he will have to pledge tens of billions of dollars’ worth of Tesla stock to support margin loans, and (3) presumably he will have to spend some time supervising Twitter, writing its moderation policies, etc., instead of inventing new electric cars or whatever for Tesla. Is it possible that Tesla will become significantly less valuable if Musk spends a lot of his time and money on Twitter, as he seems to be planning? Maybe?

> If you are a Tesla shareholder perhaps this does not worry you. Perhaps you are a big fan of Musk’s ability to execute, you want him to have new toys to keep him happy, and his multitasking doesn’t bother you since, after all, it has worked for him so far. Most of the value of Tesla has been created since Musk decided he needed to get into the tunnel-building business; maybe the more distracted Musk is the better he performs.

> You could also have a theory that is like:

> 1. Elon Musk’s tweeting is incredibly good for the valuation of Tesla’s stock, and its ability to finance its operations.
> 2. If Elon Musk owns Twitter, he can, like, make the font bigger on his own tweets. He can tweak Twitter in ways that enhance his own influence.
> 3. This will make Tesla a lot more valuable.

> We talk a lot around here about the incentives facing diversified common owners of both sides in mergers and acquisitions. This is a weird case in that Tesla is not the acquirer, so any economic benefit (or loss!) of owning Twitter will not go to Tesla’s shareholders; they will just suffer the consequences of a distracted Musk, or reap the benefits of a particularly fulfilled Musk or of a bigger font on his tweets. If you are a common owner of Twitter and Tesla stock, and Musk signs a deal with Twitter, you will be asked to vote (your Twitter shares) on the deal. You should probably care much more about what the deal means for Tesla than you should about the $54.20.