Tesla investors are starting to wonder if Elon Musk is still the right person to lead the company. Musk has focused heavily on revamping Twitter following his $44 billion acquisition in late October, leading a growing number of investors to question his ability to effectively lead the electric car maker.
Musk has sold a large amount of his personal Tesla shares this year, but that hasn’t reassured investors, as Tesla shares are down about 61% from their peak late last year. That includes his recently disclosed sale of $3.6 billion worth of stock. “No future plans to sell Tesla stock,” he tweeted after selling 4.4 million shares for $4 billion in April.
A few days ago, Liao Koyuan, one of Tesla’s largest individual shareholders, called for a leadership adjustment. He tweeted: “Elon gave up on Tesla, and now Tesla has no CEO to perform his duties. Tesla needs and should have a dedicated full-time CEO.”
Leo said that someone more focused on running the company should take over, similar to Apple’s Tim Cook. Tim Cook became Apple’s CEO following the death of Apple co-founder Steve Jobs. Jobs, like Musk, is better at visioning the company.
Liao Kaiyuan said: “Elon is just our employee. He is our employee… He is like a proud father, and his child Tesla has grown up. What Tesla needs is someone like Tim Ku a gram-like executor, not Elon.”
Tesla investors unhappy
Liao’s remarks were in stark contrast to what he said in January. At the time, he tweeted: “Buy a Tesla and start a better life in the future. Smile to your lucky self.”
At the time, Tesla had a market capitalization of $1.2 trillion, making it one of the most valuable companies in the world. Last Wednesday, Tesla’s market value fell below $500 billion for the first time since November 23, 2020.
Wedbush Securities analyst Dan Ives told CBS MoneyWatch: “For investors, the clock has struck zero. Investor discontent has seriously intensified, and Musk seems to be doubling down on the bet, with no flinching.”
Ives believes that Musk paid about $20 billion more for Twitter and needs to pay for the acquisition through his Tesla stock holdings.
“One of the bigger concerns for investors is that Musk sees Tesla as a cash machine. That’s a serious risk for Tesla stock,” Ives said.
Another concern among investors is that Musk’s far-right leanings on Twitter could lead left-wing car buyers to avoid Tesla vehicles. As more and more car manufacturers enter the electric vehicle market, they will of course have more choices. S&P Global Mobility recently forecast that Tesla’s U.S. market share will drop from 65% this year to below 20% by 2025.
Future Fund managing partner and Tesla shareholder Gary Blanco tweeted about Musk on Wednesday: “He will soon realize (if he hasn’t already) that his extreme political views are hurting Customer perception of Tesla electric vehicles. Customers don’t want their cars to be controversial. They want to drive cars that make them proud, not embarrassed.” (Fortune Chinese Network)
Translator: Liu Jinlong
Reviewer: Wang Hao
Tesla investors are starting to wonder if CEO Elon Musk is still the right man to lead the company. With much of Musk’s attention focused on Twitter, which he’s shaking up following his $44 billion takeover in late October, doubts are increasing about his ability to effectively lead the electric-vehicle maker.
It doesn’t help that he’s sold vast quantities of his personal Tesla shares this year as the carmaker’s stock has plunged about 61% from its peak late last year. That includes the sale of $3.6 billion in stock that he disclosed on Wednesday. He tweeted in April, after selling 4.4 million shares for $4 billion, “No further TSLA sales planned after today.”
On Wednesday, Leo Koguan, one of Tesla’s largest individual shareholders, called for a leadership change, tweeting: “Elon abandoned Tesla and Tesla has no working CEO. Tesla needs and deserves to have working full time CEO.”
Leo said someone more focused on the operational 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 a mere hired hands,” Leo added. “He is our employee…Elon was the proud father, Tesla has grown up. An executioner, Tim Cook-like is needed, not Elon.”
Tesla investor frustration
Leo’s comments were in sharp contrast to ones he himself offered in January, when he tweeted, “Tesla bulls, the future rainbow are here and now. Smile to your fortunate self.”
At that time, Tesla had a market cap of $1.2 trillion and ranked among the world’s most valuable companies. On Wednesday, its market cap dropped below $500 billion for the first time since Nov. 23, 2020.
“For investors, the clock has struck 12. Frustration has massively built, and Musk appears to be doubling-down, not backing away,” Wedbush Securities analyst Dan Ives told CBS MoneyWatch.
Ives believes Musk overpaid for Twitter by about $20 billion and needed to tap into his Tesla shares to pay for the acquisition.
“One of investors’ bigger concerns is that Musk is using Tesla as an ATM machine,” Ives said. “That has been a massive overhang on Tesla’s stock.”
Another concern is that Musk’s perceived lean toward far-right beliefs on Twitter could translate to left-leaning car buyers avoiding Teslas. They’ll certainly have more options, with more automakers piling into the EV space. S&P Global Mobility recently predicted that Tesla’s market share in the U.S. will drop from 65% this year to below 20% by 2025.
Gary Black, managing partner of the Future Fund and a Tesla shareholder, tweeted on Wednesday about Musk: “He will realize soon (if not already) that his polarizing political views are hurting customer perceptions of $TSLA EVs. Customers don’t want their cars to be controversial. They want to be proud as hell to drive them — not embarrassed.”