Tusk Ventures: Twitter important for Elon Musk because Tesla valuation is 'based on hype'

Venture capitalist Bradley Tusk said Wednesday that Elon Musk needs to be careful about how he handles his ownership of Twitter because the valuation of his main asset, Tesla ( NASDAQ: TSLA ), is at least partially based on the billionaire's reputation as an innovator and leader. "A lot of Tesla's valuation is based on hype, it's based on sort of promise and potential, but it's based on this belief that Elon Musk can't fail," the founder and CEO of Tusk Ventures told CNBC. "All of a sudden, if he does fail, if he can't rescue Twitter, and it seems like he's having a pretty hard time doing so, what you have to worry about is if investors say, 'you know what, is Tesla a little bit of a house of cards?'" Tusk added. TSLA edged higher on Tuesday and showed gains in Wednesday's premarket action, bouncing back from a string of declines that took the stock to a recent 52-week low. Early this week, shares of Musk's EV maker touched a 52-week low of $166.19. The stock, which set a 52-week high of $402.67 late last year, has fallen nearly 58% in 2022. The firm's market cap, which once topped $1T, is now sitting at around $530B. Looking at another of the major headlines that have dominated the conversation on Wall Street in recent weeks, Tusk also commented on the recent FTX ( FTT-USD ) situation. Tusk argued that the meltdown at Sam Bankman-Fried's cryptocurrency exchange will cause many venture capitalists to step up their due diligence in the future. He specifically pointed to Sequoia Capital, which was closely tied to FTX and has apologized to investors for its involvement with the now-bankrupt company. "Sequoia has significant egg on their face ... I suspect that on the next deal like this, they are going to do more diligence and be a little more careful about it," he said. For more on the crypto space, see why Cathie Wood says that Bitcoin could rise to $1M by 2030 .