Tesla shareholder calls for Elon Musk’s departure as stock falls 61% from peak
Tesla investors are starting to wonder if CEO Elon Musk is still the right man to lead the company. With Musk’s attention largely focused on Twitter, which he roused after his $44 billion acquisition in late October, doubts are mounting about his ability to effectively run the electric vehicle maker.
It doesn’t help that he’s sold large amounts of his personal Tesla stock this year, as the automaker’s stock has fallen about 61% since its peak late last year. That includes the $3.6 billion sale of shares that he announced on Wednesday. He tweeted in April after selling 4.4 million shares for $4 billion, “No further TSLA sales are planned after today.”
On Wednesday, KoGuan Leo, one of Tesla’s largest single shareholders, called for a leadership change. tweet: “Elon has left Tesla and Tesla does not have a functioning CEO. Tesla needs and deserves to have a full-time CEO.”
Leo said someone more focused on the operations side of the company, similar to Tim Cook at Apple, should take over the company. Cook became Apple CEO after the death of co-founder Steve Jobs, who, like Musk, was strong on the visionary side.
“Elon is just an employee,” Leo added. “He’s our employee… Elon was the proud father, Tesla has grown up. An executioner like Tim Cook is needed, not Elon.”
Leo’s comments were in stark contrast to those he himself made in January, when he tweeted: “Tesla bulls, the rainbow of the future is here and now. Smile at your happy self.”
At the time, Tesla had a market cap of $1.2 trillion and was one of the most valuable companies in the world. On Wednesday, the market cap fell below $500 billion for the first time since November 23, 2020.
“For investors, the clock has struck 12. Frustration has been building massively, and Musk seems to be doubling down and not backing down,” Wedbush Securities analyst Dan Ives told CBS MoneyWatch.
Ives believes Musk overpaid for Twitter by about $20 billion and had to tap into his Tesla stock to pay for the acquisition.
“One of the bigger concerns investors have is that Musk is using Tesla as an ATM,” Ives said. “That was a massive overhang in Tesla’s stock.”
Another concern is that Musk’s perceived inclination towards far-right beliefs on Twitter could cause left-leaning car buyers to shun Teslas. You’ll certainly have more options as more automakers push into the EV space. S&P Global Mobility recently forecast that Tesla’s market share in the U.S. will fall from 65% this year to under 20% by 2025.
Gary Black, Managing Partner of the Future Fund and Tesla shareholder, tweeted on Wednesday About Musk: “He will soon (if not already) realize that his divisive political views are affecting customer perceptions of $TSLA electric vehicles. Customers don’t want their car to be controversial. They want to be proud as hell to drive them – not embarrassed.”
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