What just happened? Elon Musk has given Tesla an ultimatum: increase his ownership in the company to 25% or he will cut back on its development of AI and robotics. The billionaire already owns 13% of the EV giant, or approximately 411 million shares, but it seems he won’t be happy unless he’s awarded another 12%.
Writing on his own X/Twitter platform, Musk warned that unless his ownership in Tesla increased to 25%, he would be “uncomfortable growing Tesla to be a leader in AI & robotics.”
Musk continued his threat by saying that without owning a quarter of Tesla, which he says is enough to be influential but not so much that he can’t be overturned, he would prefer to build products outside of the automaker.
“You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM,” he added.
Musk went on to question why large investors in Tesla who own similar stakes as he does, such as Fidelity, “don’t show up for work.” It’s likely that investors already concerned by Tesla’s declining profit margins, allegations of Musk’s drug use, his duties to other companies, and the CEO’s often erratic behavior won’t be pleased to read his latest post.
I should note that the Tesla board is great. The reason for no new “compensation plan” is that we are still waiting for a decision in my Delaware compensation case. The trial for that was held in 2022, but a verdict has yet to be made.
I put “compensation plan” in quotes,…
– Elon Musk (@elonmusk) January 15, 2024
Musk called the Tesla board “great” in a follow-up message, noting that the reason why he had not been awarded a new compensation plan is due to the Tornetta case – a shareholder said the CEO’s previous $56 billion compensation was excessive and a breach of fiduciary duty by Musk and members of the board. The case was tried in Delaware last year but a verdict has yet to be reached.
Musk reiterated that 25% is the perfect amount of ownership in Tesla and that he would be fine with a dual-class voting structure similar to the one used by Facebook. However, this would be an illegal restructuring post-IPO.
Musk sold almost $40 billion worth of Tesla shares in 2022, using most of the money to help finance his purchase of Twitter.
Back in 2021, Tesla announced the general-purpose, bi-pedal Tesla Bot during its AI Day conference. A year later, Musk said it was probably Tesla’s most important in-development product, potentially bigger than its vehicle business. There was a demo of its latest robot, Optimus Gen 2, last month (above).