Six years ago, Tesla outlined an ambitious compensation package for its chief executive that made Elon Musk one of the wealthiest men alive, and investors were all for it. Now, the world’s richest person’s desire for more control over the company is facing skepticism from those same quarters.
“Him asking for stock, the whole thing’s absurd,” said Ross Gerber, a longtime investor and Musk ally, expressing his skepticism. He further added, “I’m very grateful for the Tesla investment I made 10 years ago. We’ve reached a point as a firm, and me personally, where I feel the story is played out.”
While Gerber hasn’t pulled out of Tesla, he has tempered expectations about the company’s future — and become a vocal critic of Musk, pointing to mounting frustration with the entrepreneur regarded as brilliant but erratic.
Challenges Faced by Musk
Musk has faced backlash, especially after firing off an antisemitic tweet in November last year and amid the controversial overhaul of Twitter after his $44 billion purchase of the company, rebranding it as X. This led to advertisers boycotting the platform after the antisemitic post. In response, Musk launched a campaign to persuade Tesla shareholders to restore his stake in the company, highlighting concerns about his influence and control, particularly regarding artificial intelligence bets at Tesla.
Market Performance and Investor Reactions
Musk’s plea coincided with a devastating earnings report revealing stagnating revenue, generated growth in sales volume, and a forecast of potentially “notably lower growth rate” for 2024. The implications of this were reflected in Tesla’s stock plummeting by 12 percent, eroding tens of billions of its value, triggering concerns among investors and analysts.
Investor Views and Reactions
Dan Ives, an analyst with Wedbush Securities, expressed his understanding of Musk’s intentions but raised concerns about the timing of his request for more control. Similarly, Tesla investor Nell Minow likened Musk’s plea for more control to “extortion,” questioning his request for a larger stake of the company that he hadn’t earned.
Gene Munster, managing partner at Deepwater Asset Management, acknowledged Musk’s quest for greater control and emphasized the significance of Tesla to him, despite the sobering guidance from the company.
Musk’s Financial Position
Musk, who doesn’t take a traditional salary at Tesla, relies on added shares and rising stock prices to boost his net worth, currently estimated to be $199 billion. However, his increasing annual tax bills on stock sales, including capital gains, have raised concerns that he may need to dip into his Tesla stake to pay the tab.
The resistance faced by Elon Musk
from Tesla investors over his push for more control reflects the growing skepticism and concerns surrounding his decisions and their impact on the company’s performance and shareholder value. It underscores the delicate balance between visionary leadership and investor confidence, raising broader questions about corporate governance and accountability in high-profile tech companies.
The Unraveling of Elon Musk’s Relationship With Ross Gerber
Elon Musk, the enigmatic CEO of Tesla and SpaceX
, has always been a controversial figure, known for his unorthodox behavior and often inflammatory statements on social media. Despite this, Musk has maintained a loyal following and has been able to weather numerous controversies throughout his career. However, his relationship with Ross Gerber, a prominent Tesla investor and advocate, has taken a turn for the worse in recent months.
The turning point in Musk and Gerber’s relationship occurred in November, when investors in Gerber’s management fund expressed their desire to withdraw their investments from Tesla. The reason for this sudden shift in sentiment became clear when Musk used his social media platform to endorse a conspiracy theory accusing Jewish communities of promoting “hatred against whites.” This blatant display of antisemitism was the final straw for many investors, who were no longer willing to support Musk’s behavior.
Gerber, who had been a vocal supporter of Musk in the past, publicly criticized the entrepreneur for jeopardizing Tesla’s reputation. He emphasized the significance of building a positive reputation over a lifetime and the ease with which it can be tarnished in a single day. Gerber’s public admonishment of Musk’s actions reflected the growing rift between the two individuals.
In response to Gerber’s public criticism, Musk chose to block Gerber on the social media platform, a move that Gerber viewed as a form of retaliation. This action struck Gerber as ironic, considering Musk’s public persona as a champion of free speech. The escalating conflict between the two individuals was indicative of the irreparable damage that had been done to their once amicable relationship.
As the fallout from Musk’s antisemitic remarks continued to unfold, Gerber reached out to X CEO Linda Yaccarino, proposing that the company collaborate with the Anti-Defamation League (ADL) to address concerns regarding content moderation. Yaccarino acknowledged the importance of the ADL and expressed willingness to engage in a partnership with the organization, despite Musk’s previous threats of legal action against the ADL.
In a more personal exchange, Yaccarino assured Gerber of efforts to address his concerns about impersonation on X. However, she failed to respond to Gerber’s direct appeal to intervene in Musk’s decision to block him on the platform. Gerber made a heartfelt plea to Yaccarino, citing his longstanding support for Musk and his genuine desire to help prevent further missteps by the Tesla CEO.
The deteriorating relationship between Elon Musk and Ross Gerber serves as a cautionary tale, highlighting the potential consequences of unchecked behavior, particularly in the realm of social media. The clash between these two influential figures underscores the significance of accountability and the impact of words and actions on personal and professional relationships. As the saga unfolds, it remains to be seen whether reconciliation is possible or if irreparable damage has been done to their once mutually beneficial partnership.