Tesla needs a ‘real CEO’ if Elon Musk isn’t doing his job, investor

Tesla CEO Elon Musk

Tesla CEO Elon Musk NurFoto

Tesla’s fluctuating stock price provoked contrasting reactions from two of the electric car company’s top investors. Cathie Wood, Tesla’s longtime bull and one of its biggest investors, continues to buy the shares even as they continue to fall. Meanwhile, Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, expressed concerns about Musk’s leadership and declining stock price.

So far this year, Tesla shares are down 30%. On Thursday, it hit a 10-month low of $160 per share. The decline is all the more notable because it follows an extreme high the company saw in November 2021 when its stock price rose to $407. The late 2021 peak saw a 2,600% rally, compared to just $15 per share in August 2019. In the last 28 months or so since then, the stock has fallen about 60%.

According to Gerber, much of Tesla’s stock decline could be reversed if Musk were to change his behavior. “This could change very quickly if Tesla gets a real CEO who will actually help the company, or if Elon changes his tune and actually goes back to work at Tesla and promotes the brand in a positive way,” Gerber said Thursday.

In the past, Gerber has placed so much emphasis on Musk’s individual decisions because of the level of influence he has over the company. This isn’t the first time Gerber has been frustrated with Musk and the level of control he has at Tesla. At a performance in January op CNBC Gerber said the company was almost entirely under Musk’s control. Although Musk technically only owns 13% of the stock, with an option on another 7%, his tight grip on the board makes Tesla a company that is “100% controlled by Elon,” Geber said.

In February, Gerber continued to express his belief in Tesla’s long-term growth potential and Musk’s position at the company. Although he did advise Tesla’s CEO to “just keep your mouth shut,” Gerber told Yahoo Finance.

In his most recent comments, Gerber called some of Musk’s activities outside Tesla as distracting. Gerber previously said Musk was “over his skies” running social media platform Tesla investors sued Musk, claiming that $56 billion was too much to pay a single director. A Delaware judge declared the pay package invalid at the beginning of this year.

“The original story that I think most investors bought into Tesla didn’t really include Elon and Twitter,” Gerber said. “For a long time we all hoped that this wouldn’t really affect Tesla and the demand for its products. We all know that’s happened now. Demand for Tesla products is obviously lower. They had to discount and do a lot of things that hurt margins, returns and ultimately profits for Tesla.”

Demand for electric vehicles decreased across the board. Some of the largest electric vehicle manufacturers are scaling back production. Consumers are returning to traditional cars with internal combustion engines or hybrids due to concerns about battery resilience and range.

Meanwhile, Wood and her fund ARK Invest have long supported Tesla and Musk. In 2023, once the stock had recovered from the drastic declines in 2022, she started harvesting returns and selling some shares. As shares continued to fall from January to this month, she bought the dip and strengthened her position. In January, Wood’s ETF bought about $141 million worth of Tesla stock — a move she repeated this week when she picked up another $35 million worth.

Wood is unimpressed by the declining demand for electric vehicles. She calls the decision by some Detroit automakers, such as GM and Ford, to curtail their plans for electric vehicles a mistake. However, it was a misjudgment that she welcomed like a big Tesla bull. ‘The fact that they are withdrawing means that there is more [market] share for Tesla and others who choose to go for it,” Wood shared Bloomberg in December.

Musk and Wood have a good relationship. The two recently had a public conversation about it Spaces, with topics ranging from passive investing to the complexities of running a publicly traded company. In the past, Wood has praised Musk as a problem solver. During a CNBC interview in October, she said that the “intensity of his brain cells takes him to new answers” ​​when faced with business challenges. At Tesla, this means the company has moved closer to its goal of autonomous vehicles, which Wood called “a game changer.”

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