It has been a difficult few days for Tesla’s (NASDAQ: TSLA) CEO Elon Musk. The company recently made an announcement that they would be shutting down most of their stores and moving to online-only sales for the most part. For employees who were promised by Elon Musk that these kinds of mass layoffs wouldn’t happen again, it’s undoubtedly a disappointing announcement.
Coupled with the recent revelations of a $35,000 Model S and a new Model Y failing to get the positive response he was hoping; Tesla’s CEO has found himself under ever mounting pressure. Today, a major Tesla backer made news when they said they wouldn’t mind Elon Musk leaving as CEO.
Braillie Gifford is the second-largest stakeholder in the automaker besides Musk himself. The U.K. investment firm owns around 8 percent of the company, a stake estimated at $3.8 billion. In comparison, Musk owns 19.7 percent while the third largest stakeholder, T. Row Price, owns 5.2 percent. Head of global equities for Baillie Gifford, James Anderson, went on to say that the company “wouldn’t be against him having a different role. I don’t think he needs to be CEO.”
The increasingly critical sentiment against the automakers CEO and figurehead comes as Musk is dealing with contempt of court allegations after tweeting information about Tesla’s production outlook that the SEC felt was inaccurate. Tesla admitted to the SEC that Musk didn’t receive corporate legal approval to tweet the information, which was one of the requirements the agency mandated in the settlement agreement between themselves and Tesla last fall.
The agreement made saw Elon Musk stepping down as the chairman of Tesla alongside paying a $20 million dollar fine in the process. “Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavoring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision,” added the SEC at the time. While many hoped that this would be the last of Musk’s tweets, the fact that the SEC might have to step in again is worrying to many.
Despite the automaker formally stating that it’s crucial for Elon Musk to remain as CEO of the company, many other shareholders disagree with this statement. Anderson went on to add that while Musk is still crucial to the automaker, there’s nothing stopping him from moving to a more ceremonial figurehead type position, specifically wording it as “chief ideologue.”
Tesla’s stock has dropped as much as 16 percent since Thursday when a number of announcements were made by the company.
Tesla Company Profile
Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles.
It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. – Bloomberg