[ad_1]
Elon Musk’s apparent ultimatum to Tesla’s board to gain more control of the automaker could hurt Tesla’s stock, analysts say. Musk posted on his own social media platform X on Monday about his displeasure at making Tesla a leader in AI and robotics without controlling 25% of the company. “Unless otherwise, I would like to develop products outside of Tesla,” Musk wrote. Musk controlled about 25% of Tesla before selling his stake in 2022 to finance the Twitter acquisition, according to JPMorgan analyst Ryan Brinkman. He currently controls about 13% of Tesla stock. Brinkmann told clients in a research note on Tuesday that regaining 25% control of the automaker would require “effective dilution of other investors’ stakes, possibly through new compensation plan arrangements.” He said there is. Brinkman said Musk’s demands will weigh on the stock price because they increase the likelihood that Musk will resign as CEO if things don’t go his way, increasing the cost to shareholders of keeping him on the board. He said it would be. Jefferies analyst Philippe Fouchois told clients in a research note Tuesday that Musk’s demands are “short-term” because Tesla’s valuation multiples already factor in significant upside from non-automotive businesses. “This raises the risk of further rating downgrades and further volatility.” Investors will likely begin to question Musk’s recent track record at Tesla, Fouchois wrote. Uchova said they blame Musk’s dilution of Tesla shareholders to fund the Twitter acquisition, as well as Musk’s strategies and products over the past two years that have hurt growth, profits and leadership integrity. This raises questions about the priorities of the Brinkman said investors may also have questions about Tesla’s corporate governance given what they have learned about Musk’s compensation issues on social media. Nevertheless, Jeffries expects Tesla’s board to approve a separate CEO super-compensation plan to keep AI development within Tesla, Fouchois wrote. Jefferies currently has an “hold” rating on Tesla stock and a price target of $225, implying a 2.3% upside from Tuesday’s closing price of $219.91. JPMorgan rates Tesla underweight and sets a price target of $135, implying a significant downside of 38% from the previous day’s closing price.
[ad_2]
Source link
