(BFM Bourse) – The richest man in the world said that unless he owned 25% of the company’s voting rights, he was not comfortable with the idea of making Tesla a leader of AI and robotics and thus preferred to build products outside the company. But allowing Musk to have this threshold of voting rights is a headache for the company.
After offloading, according to Bloomberg, nearly $40 billion in Tesla shares to finance the acquisition of the social network Twitter, Elon Musk intends to strengthen his influence within the electric car manufacturer.
On his social network X (formerly Twitter), the South African businessman posted a message somewhat worrying, Monday evening. The world’s richest person said he was “uncomfortable with the idea of making Tesla a leader in artificial intelligence (AI) and robotics without having about 25% of the voting rights” of the company.
“If I have 25%, that means I have influence, but I can be removed if twice as many shareholders vote against me as for me,” he argues.
“If not, I would rather build products outside of Tesla. You don’t seem to understand that Tesla is not one start-up, but a dozen (start-ups). Just look the delta between what Tesla and GM (General Motors) does,” continued the manager.
Elon Musk currently owns 13% of Tesla’s capital, but this stake once reached 22%.
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A significant risk for Tesla stock
The manager thus seems to be half-heartedly threatening to house the future major AI and robotics technologies from which Tesla could benefit in an external company, which would thus serve as a supplier to the automobile group.
At least that’s what Dan Ives, technology sector analyst at Wedbush, understands. “It’s no secret and a key part of our bullish thesis on action that all AI initiatives should stay within Tesla, whether it’s Dojo (a supercomputer , Editor’s note), Optimus (Tesla’s humanoid robot), FSD (“full self driving”, autonomous driving technology), various robotaxis or other robotic developments,” explains the analyst.
“The stock market rightly (in our view) views Tesla as a disruptive technology leader and if Musk ultimately takes the path of creating his own company (separate from Tesla) for his next-generation AI projects, it would would clearly be a big negative point for Tesla’s stock market history,” continues Dan Ives.
According to the expert, the group’s board of directors and its main shareholders are however well aware of these issues and the risk linked to Elon Musk’s “key man” profile at Tesla.
The issue is all the more crucial since Elon Musk himself affirmed in Paris last spring that autonomous driving technologies, which are obviously closely linked to artificial intelligence, remained the keystone of the valorization of Tesla on the stock market
Legal obstacles
The problem is that granting 25% of voting rights to Elon Musk is not simple. The manager explained that he could very well have been satisfied with a system with two categories of shares, with one class giving the right to more voting rights. However, he explains on 2010.
Musk could theoretically, as CEO of Tesla, claim compensation in shares which would mechanically increase his share and therefore his voting rights, even if it means creating dilution for other shareholders. Except that is not immediately possible, explains Musk on performance, according to CNBC, is the subject of a legal challenge in Delaware. “The trial was held in 2022, but the verdict has not yet been rendered,” says Elon Musk.
The room for maneuver therefore seems very limited. “The other problem is that Musk sold about 100 million shares in 2022 to help finance the purchase of Twitter in a move that still haunts the stock today in the eyes of many investors,” adds Dan Ives of Wedbush.
“We also believe that Musk analyst.
Towards a resolution in the coming months
In pre-opening trading on Wall Street, Tesla shares lost only 1.3% around 2 p.m. (while the S&P futures contract dropped 0.33%) after falling 3.7% the day before.
“Ultimately, we believe the board and Musk will be able to resolve this issue over the next 3-6 months and ultimately all AI initiatives will remain within of Tesla”, judge Dan Ives. While he understands Musk’s point of view, “dilution and shareholder approval is a process that must be managed carefully and it will not happen overnight,” he continues.
Ultimately, the analyst argues that Elon Musk remains a key asset and even “the heart and lungs of Tesla”.
“We think this is just another ‘drama’ in Tesla’s story that won’t bear fruit, but that’s not what the ‘ “bulls” want to see, because it creates noise and gives bears something to exploit,” he concludes.
Let us remember, however, that Elon Musk has the habit of calling the shots on X with Tesla shares, without necessarily following through with his intentions. For example, in 2018 he expressed the idea of delisting the group, before retracting some time later.
Julien Marion – ©2024 BFM Bourse
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