During his earnings presentation Elon Musk this week about his company Tesla, which faces endless problems, starting with losing prestige by get out of the ranking of the companies with the highest market capitalization this Friday, the CEO of the company expressed several of his concerns.
It turns out that the tycoon now fears that he will be kicked out of his own company, so he is looking for a system similar to the one Meta uses, in which there are two types of actions, those who have the right to vote and those who do not. In this way, he would secure a place on the board of directors.
Musk He referred to the possibility of being removed due to his limited influence in the company at this stage, mentioning the possibility that a random shareholder advisory firm could make that decision. Humorously, he pointed to proxy advisors Glass Lewis and Institutional Shareholder Services, referring to them as the extremist group ISISclaiming that they were infiltrated by “activists” with “strange ideas.”
With around 13% participation, Musk is Tesla’s largest and most influential shareholder. He recently made a public call to the board for another big stock award after selling almost US$40 billion in shares to cover taxes and finance the acquisition of Twitter, the social media platform he renamed X.
Although some optimistic investors justify Tesla’s high valuation by its potential in artificial intelligence and robotics, Musk has indicated that, without at least a 25% stake, will explore product development in those fields elsewhere. During the earnings call, Musk highlighted these new opportunities rather than addressing slow growth and declining profit margins in the core electric vehicle business.
Tesla: the concern of investors
On Wednesday, Musk’s words added more fuel to the fire, as he suggested the possibility of creating a dual class of shares, similar to that of companies such as Meta Platforms Inc., owner of Facebook, as a way to increase its share to 25%. He described this structure as “ideal” and clarified that he is not seeking to obtain “additional economics.”
Regarding the 25% level, Musk commented: “It’s not enough that I can control the company even if I go crazy, but it is enough to have a strong influence.“.
Tesla’s board is awaiting a decision from the Delaware Court of Chancery on a case brought by a shareholder alleging that directors failed to exercise independence from Musk in designing his $55 billion performance award in 2018.
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