In late 2022, Elon Musk sold billions of dollars’ worth of Tesla stock to fund his purchase of Twitter. Since then, Musk’s increasingly troubling behavior — and reports of his drug use (which Musk has somewhat disputed) — have altered his public image among some observers. Earlier this month, Musk made an unexpected move, asking Tesla’s board for significantly more control over the company. As Jack Ewing reported for the New York Times, Musk threatened to “pursue unspecified ventures outside of Tesla” if he wasn’t given more shares of the company.
It’s been over a week since Musk made his request, which begs the question: how are Tesla’s investors reacting? According to a report by Faiz Siddiqui at The Washington Post, the answer is: not terribly well.
The article includes candid comments from analysts like Daniel Ives, who told the Post, “The timing’s the issue.” Nell Minow of ValueEdge Advisers was more blunt, saying that Musk’s demands were situated somewhere in the middle of “a 2-year-old tantrum and a gangster saying it would be too bad to have a brick thrown through your candy store window.”
As Minow points out, the structure of Tesla means that there isn’t much Musk can do if the shareholders say no. And it isn’t hard to see why Musk’s recent behavior might give plenty of those shareholders pause in further emboldening him.
Report: Tesla’s Latest Autopilot Update Doesn’t Fix MuchA wide-ranging recall might not fix the intended issues
Besides Musk’s — shall we say — unfiltered comments on social media, there’s also the ongoing controversy surrounding Tesla’s self-driving mode and the less-than-thrilling debut of the Cybertruck. There’s also the matter of Tesla’s finances, which didn’t meet analyst expectations in the fourth quarter of 2023. Plenty of companies have ups and downs, to be sure — and the growing number of automakers opting into Tesla’s EV charging network is encouraging news for the company — but it isn’t hard to see why Tesla investors might hesitate before giving Musk more control right now.
This article was featured in the InsideHook newsletter. Sign up now.