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Electric Vehicle Manufacturer stands to lose Elon Musk after the billionaire posted on social media he would be uncomfortable growing the company without at least a 25% voting control, Reuters reports.
Elon Musk, the CEO of Tesla, claimed that he would prefer to create things outside of the electric car firm, unless he gained enough shares at Tesla to be influential, but not so much that he cannot be overruled, in a post on X Musk was advocating for a minimum of a quarter of the technical company’s voting power.
CNBC reports that as per the company’s latest financial statement for the third quarter of 2023, Musk now holds over 411 million shares of the 3.19 billion outstanding shares of common stock, or nearly 13% of Tesla.
(Photo : ANDREAS SOLARO/AFP via Getty Images)
X (formerly Twitter) CEO Elon Musk raises speaks during the Atreju political meeting organised by the young militants of Italian right wing party Brothers of Italy (Fratelli d’Italia) on December 16, 2023 at the Sant’Angelo Castle in Rome.
This is reportedly a huge stake, especially considering that Musk sold his shares worth tens of billions of dollars in Tesla just two years ago, partly to finance a $44 billion leveraged purchase of Twitter. Musk is now attempting to gain even more power over Tesla.
Reuters adds that Elon also claimed in another article that he would be okay with a two-class voting system in order to attain his objective of 25% voting control, but that following the first public offering in Delaware, he was informed that this was not possible.
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Elon Musk vs. Tesla
About his salary arrangement, Musk is reportedly presently the target of a lawsuit. In an attempt to demonstrate that Musk used his power over the board to get an enormous remuneration package that exempted him from having to work for the electric vehicle manufacturer full-time, Tesla shareholder Richard Tornetta filed a lawsuit against Musk and the board in 2018.
As per Yahoo Finance, the richest person in the world is battling complaints from shareholders over a wide range of topics, including Tesla’s succession planning and claims that he is preoccupied with activities related to X, the platform he acquired in 2022.
Tesla’s Woes
The vehicle rental giant Hertz Global Holdings Inc. reversed course on EVs, there was another price drop in China, and there were indications that labor costs were going up, among other bad news that impacted the firm.
Tesla proves be losing a significant amout of money during this issue as Fortune reports that the corporation has lost more than $94 billion in market worth in only the first two weeks of 2024. The report states that it is not difficult to see why, since the Austin, Texas-based EV manufacturer has been subjected to a deluge of unfavorable press, all whilst EV demand, particularly in the US, is growing more slowly.
The largest decline in market value that Tesla has seen within a comparable time frame since going public in 2010 has since then occurred at just the beginning of this year.
Related Article: Elon Musk Teases Shipping Cybertrucks to China: Is It Possible?
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