Elon Musk is the CEO of Tesla, Twitter and SpaceX. REUTERS/Steve Nesius
Elon Musk’s demands for more control over Tesla in return for keeping the AI project at the company amount to “blackmail,” a long-time investor says.
Musk said he doesn’t feel comfortable developing new projects at Tesla unless his stake is increased to at least 25 percent.
“Now he appears to be blackmailing Tesla shareholders by saying he won’t build anything for us unless he gets another $30 billion.”
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.
Elon Musk’s comments about increasing his stake in his own electric vehicle company are bizarre and amount to “blackmail” against Tesla investors, according to long-time Tesla investor Ross Gerber.
In an interview with CNBC on Tuesday, Gerber pointed to Musk’s post X in which the Tesla CEO said he would feel “uncomfortable” developing robotics and artificial intelligence (AI) projects at Tesla unless his stake was increased to at least 25 percent. Shifting such projects to another entity or company would be a major detriment to the company’s growth story, analysts argued this week.
However, “the idea that Musk doesn’t already have control of Tesla is absurd,” said Gerber, since Musk already owns 13 percent of the company, which is worth around $150 billion (around €138 billion). Musk previously owned 22 percent until he sold nearly $40 billion worth of shares to finance his purchase of Twitter in late 2022.
Thanks to Musk’s stock options, Gerber estimates his current stake in Tesla is around 20 percent.
“Now he seems to be blackmailing Tesla shareholders by saying he won’t build anything for us unless he gets another $30 billion (around €27.5 billion),” Gerber said. “In the modern world, where does it make logical sense to pay $30 billion to a CEO who already has a $150 billion stake in the company?” he added added later.
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Elon Musk’s control of Tesla
According to Gerber, Musk’s control of the company is facilitated by Tesla’s board of directors, which is made up of “all of his friends” and members of his family. Musk’s brother, Kimbal Musk, is one such member of the Tesla board. James Murdoch and former Tesla CTO JB Straubel are other board members known to be close to Musk.
Through these contacts, Tesla is in practice 100 percent controlled by Musk, said Gerber.
“The idea that he doesn’t control Tesla when everyone on the board is a friend or family member of his is the part I really want to reject. He controls Tesla more than anyone controls any other company,” Gerber said. “The idea that he would need more shares to do that just seems strange to me.”
Musk last year founded an artificial intelligence company called xAI, a startup that aims to “advance our mysterious understanding of the universe,” according to a statement on the website. The company is looking to raise $1 billion through a capital increase and has already raised $135 million from investors, according to a recent SEC filing.
Read the original article Business Insider.
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