(qlmbusinessnews.com Wed, 17th Jan, 2024) London, UK —
“Elon Musk's Power Play: The Quest for Greater Tesla Control Unleashes Market Waves”
In a recent announcement, Tesla's enigmatic CEO Elon Musk expressed his intention to secure a larger stake in the electric car giant, reigniting discussions about the magnate's compensation package. Approximately two years ago, Musk sold a significant portion of his Tesla shares to fund the acquisition of the social media platform Twitter, now rebranded as X. Presently, Musk owns around 13% of Tesla but advocates for a more substantial stake to bolster control over the company's trajectory.
Musk contends that the current ownership structure renders Tesla susceptible to potential takeovers by what he terms “dubious interests.” His specific concern centres around Tesla's investments in artificial intelligence (AI) features. In a post on X, Musk voiced his discomfort about steering Tesla towards AI and robotics leadership without securing 25% voting control.
“I am uncomfortable growing Tesla to be a leader in AI and robotics without having 25% voting control,” Musk stated in his X post, adding that, without this level of control, he would prefer to develop products outside of Tesla.
Dan Ives, an analyst at Wedbush Securities, noted that Musk's comments have triggered a “firestorm” for Tesla, a company that positions self-driving and automated capabilities as integral to its future. Ives cautioned that if Musk were to establish a separate company for his next-generation AI projects, it could significantly impact Tesla's narrative.
While Ives anticipates the board resolving the issue, he acknowledged that Musk's public dialogue on such a crucial matter on X is less than ideal for the investment community, generating temporary turbulence. Consequently, Tesla's shares opened more than 2% lower following Musk's statements.
Musk, whose status as the world's wealthiest person is closely linked to his Tesla holdings, praised the current board but mentioned that the firm is awaiting a court decision in an ongoing lawsuit related to a pay deal. Richard Tornetta, a shareholder, has filed a lawsuit challenging a 10-year pay package granted to Musk in 2018, arguing that a significant portion of the shares belonged to individuals closely associated with Musk, despite the package receiving approval from over 70% of Tesla shareholders.
The outcome of this legal battle could influence Musk's compensation and potentially reshape Tesla's leadership dynamics.
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