In a significant development, investors at electric vehicle maker Tesla Inc. have urged the board to rein in CEO Elon Musk after his latest stunt to launch a new political party led the company’s stock to sink.
“The board can’t just sit here and watch this go by without saying something and putting guardrails in,” Dan Ives, managing director of Wedbush Securities, a wealth management firm that holds shares in Tesla, told the Washington Post.
“I’m hearing from many shareholders that the frustration is hitting a tipping point,” Ives added.
Another Tesla shareholder James Fishback, the Trump-supporting CEO of the Azoria investment company, said over the weekend that he’d be backing out of a new fund focused on the EV maker.
“I encourage the Board to meet immediately and ask Mr Musk to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” Fishback wrote to Robyn Denholm, the chair of Tesla’s Board of Directors.
“This creates a conflict with his full-time responsibilities as CEO of Tesla,” he added. “It diverts his focus and energy away from Tesla’s employees and shareholders.”
On Monday, Tesla shares had slumped a whopping 7%.
According to Axios report, the EV company’s shares are down by a 14% since the outset of Musk’s feud with Trump earlier in June.
Elon Musk’s new political party
Over the weekend, Musk announced the launch of a new political party, which has piqued the interest of MAGA critics.
US President Donald Trump blasted Musk’s bid to start a new political party, intensifying a feud between former allies and deepening investors’ concerns about implications for Tesla and other companies led by Musk.
“Third parties have never worked, so he can have fun with it, but I think it’s ridiculous,” Trump told reporters on Sunday.
The US has “always been a two-party system,” he added.
On Saturday, Musk said a new “America Party” he’d been threatening to launch was formed, a day after Trump signed a tax-cut and spending bill into law that the Tesla CEO had denounced.
