Elon Musk wants 25% voting power in Tesla else he prefers "to build products outside of Tesla," he said on X (formerly Twitter). Tesla's CEO has publicly voiced his desire for approximately 25% voting control within the company.
Following the sale of a substantial portion of his Tesla stake to fund the acquisition of Twitter, Musk emphasized in several posts, "Unless that is the case, I would prefer to build products outside of Tesla." While Musk retains nearly 13% of Tesla's shares, his push for increased influence sheds light on his strategic vision for the company.
Elon Musk on X saying he wants 25% voting power.
Tesla is currently facing challenges in the stock market, with a reported loss of $94 billion in market value attributed to slowed growth and shrinking profit margins. Musk's involvement in a Wall Street Journal report detailing his drug use has added complexity to Tesla's situation.
The company's shares experienced a 2.7% decline following Musk's recent announcements. Presently valued at $695.8 billion, Tesla's market capitalization represents a significant shift from its peak valuation of over $1.2 trillion before the Twitter deal.
Musk's actions, notably the substantial sell-off of shares in 2022 and the subsequent Twitter acquisition led to fluctuations in his net worth. Despite facing challenges, Musk's fortune rebounded in 2023, with Tesla's shares doubling and his various ventures, including SpaceX, contributing to his estimated net worth of $206.1 billion.
In an earlier trial in Delaware, several Tesla board members agreed to pay back $735 million to the company in a settlement agreement over their own director compensation.
Musk's call for increased control coincides with an apparent shift in Tesla's focus. Despite previous claims of Tesla's leadership in AI and robotics, Musk now expresses discomfort in advancing Tesla's presence in these domains without enhanced voting influence.
The CEO clarified, "You don’t seem to understand that Tesla is not one startup, but a dozen."
This statement aligns with Tesla's evolving business description in its third-quarter 2023 financial filing, where the company highlighted its increasing focus on products and services based on artificial intelligence, robotics, and automation.
As Musk advocates for greater influence, Tesla's board faces mounting challenges. Responsible for determining CEO and director compensation, the board is under scrutiny for various issues, including Musk's divided focus as he manages multiple ventures alongside Tesla, his controversial political and cultural commentary, ongoing federal probes, and concerns over reported drug use.
Musk is currently involved in a trial in Delaware over his earlier $56 billion pay package from Tesla. Shareholder Richard J. Tornetta has sued Musk and Tesla, alleging excessive compensation and a breach of fiduciary duty. Musk noted that Tesla's board is awaiting a Delaware Chancery Court decision before establishing a new compensation plan.
In conclusion, Musk's call for increased voting control, coupled with the ongoing legal battles, adds complexity to Tesla's challenges. The $735 million settlement, along with the upcoming Delaware Chancery Court decision, will play a crucial role in shaping the company's direction. The settlement, acknowledging the board's financial responsibility, underscores the intricate landscape Tesla navigates amidst Musk's strategic maneuvers and shifting corporate focus.