The ongoing battle between Tesla’s (TSLA) CEO Elon Musk and Brazil’s Supreme Court over his social media company X is beginning to affect some of his other businesses, including SpaceX and Starlink. Musk’s company, SpaceX, is evacuating its employees from Brazil and has issued warnings to others about traveling to the country. SpaceX is a manufacturer of advanced rockets and spacecraft.
SpaceX Advises Employees to Avoid Brazil
In an email sent late last week, SpaceX President Gwynne Shotwell advised employees to avoid traveling to Brazil for either business or leisure, according to a Wall Street Journal report that cited sources familiar with this email. Furthermore, the company began relocating its small group of non-Brazilian employees from the country.
Additionally, Musk’s spat with the Brazilian Supreme Court is also affecting his satellite internet business, Starlink. But before that, let us look at the details of Musk’s battle with Brazil’s highest court.
Musk’s Spat with the Brazilian Supreme Court
For several months, Musk has been entangled in a dispute with Brazilian Supreme Court Justice Alexandre de Moraes, who ordered X to remove accounts accused of spreading hate speech. In response, X halted its operations in Brazil in August, citing concerns for the safety of its employees. The conflict escalated last week when the court imposed a ban on X, stating that it would only lift the ban once the company complied with legal obligations, including paying fines and appointing a legal director in Brazil.
Additionally, the court took measures against SpaceX’s Starlink, freezing its finances in Brazil and preventing it from conducting any further transactions. According to Starlink, the court held the company financially accountable for fines levied against X. On Tuesday, Starlink addressed the issue in a post on X, assuring Brazilian customers that it would maintain service while also beginning legal proceedings to challenge the order. Although Starlink promised to comply with the court’s directive to block access to X, it deemed the ruling illegal.
Will Musk’s Battle with the Court in Brazil Affect TSLA?
Despite these developments, the impact on Musk’s electric vehicle company, Tesla, remains unclear, as Tesla does not currently sell cars in Brazil. Notably, Musk met with Brazil’s former president, Jair Bolsonaro, in 2020, during which Bolsonaro expressed interest in bringing Tesla to Brazil, though these plans never materialized.
Is Tesla a Buy, Sell, or Hold?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 10 Buys, 14 Holds, and seven Sells. Over the past year, TSLA has declined by more than 10%, and the average TSLA price target of $211.46 implies a downside potential of 3.6% from current levels.
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