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Elon Musk famously sold Tesla shares worth billions of dollars in the past few years to pay off his tax liabilities and then to acquire the X social media platform at a nosebleed valuation. Those equity liquidations are now coming back to haunt him.
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
— Elon Musk (@elonmusk) January 15, 2024
Just moments ago, in response to an X post that questioned the need for a new compensation package for the CEO of Tesla, Elon Musk dropped a bombshell when he declared that he was uncomfortable working at Tesla with his current voting power. Bear in mind that the mega-billionaire owns roughly 13 percent of the EV giant, corresponding to around 412 million shares.
Elon Musk elaborated that he had sufficient voting power at Tesla to be “influential” but not enough to prevent being “overturned” on occasion. The ultra-billionaire then laid down the gauntlet, threatening to “build products outside of Tesla” should the EV giant’s board not acquiesce to his demands.
Bear in mind that Tesla underwent a trial in Delaware in 2022, where some shareholders asserted that Elon Musk’s 2018 compensation plan should be voided by the court as it was a result of sham negotiations and dictated by Musk himself. While the trial has concluded, a verdict in this case is yet to be delivered.
I should note that the Tesla board is great. The reason for no new “compensation plan” is that we are still waiting for a decision in my Delaware compensation case. The trial for that was held in 2022, but a verdict has yet to be made.
I put “compensation plan” in quotes,…
— Elon Musk (@elonmusk) January 15, 2024
In a subsequent X post, Elon Musk added that with sub-15% of the voting rights in Tesla, the bar to override him is “too easy.”
Seems to me that $TSLA uberbulls go from one magic bullet to the next to justify TSLA valuations 5-10x today’s price level. First it was Robotaxis, and now with “Supervised FSD” reality settling in, it’s Bots. TSLA retail investors should distinguish between economics today… pic.twitter.com/yHVCH8WzwS
— Gary Black (@garyblack00) January 15, 2024
Of course, today’s fireworks come as the usually effervescent hype around Tesla seems to have lost some of its patina. As recently admitted by Gary Black, a known Tesla bull, Elon Musk’s vision of millions of connected robotaxis is not about to be realized anytime soon. Instead, the focus has now turned toward the “supervised FSD” capability of Tesla’s Autopilot ADAS.
Hybrids (HEV) & ICE sales will grow faster than battery electric vehicles (BEV) for a while. $TSLA & other BEV makers’ profits should suffer.
Growth since 2020 to accelerate:
China HEV: +813%
China BEV: +589%EU HEV: +651%
EU BEV: +175%US HEV: +290%
US BEV: +420% pic.twitter.com/zsdpHRV2DI— Motorhead (@BradMunchen) January 8, 2024
Meanwhile, as the EV market cools, hybrids and ICE vehicles are all set to regain some of their lost market share.
It’s been a rough couple weeks for us $TSLA investors. Hang tough – 4Q earnings and FY24 volume guidance are coming, the Cybertruck halo effect is real, the $7,500 US EV rebate is now officially off invoice, FSD L4 is coming soon, and the $25K next gen vehicle will likely come… pic.twitter.com/JvqKUCAOLt
— Gary Black (@garyblack00) January 13, 2024
Hopefully, the much-anticipated “halo effect” from the sale of Cybertruck will start materializing in the near future, insulating Tesla from a deeper demand-related malaise in 2024.