Robert Way
Tesla’s (NASDAQ:TSLA) stock has taken a substantial hit this year amid slowed sales and concerns that CEO Elon Musk has been spending too much time on outside interests such as politics and not enough on running the company.
We asked Seeking Alpha analysts Jonathan Weber, James Foord and Geneva Investor if they see Tesla’s (NASDAQ:TSLA) board of directors asking Musk to limit his outside activities so he can focus more on the EV maker.
Jonathan Weber: Tesla CEO Elon Musk remains highly controversial, and even some Tesla (TSLA) bulls like Dan Ives have started to see his politics as an issue for the stock. On the other hand, Tesla’s board has been “Musk-friendly” and reluctant to move against him, and his significant ownership stake in the company gives him a lot of power. While pressure on Musk from analysts and investors could be building, especially if Q2 earnings turn out to be bad, it is far from guaranteed that the board will move against Musk in a big way.
James Foord: In terms of optics, it would make sense for the board of directors to at least try to curtail some of Musk’s outside activities and provide some guidelines moving forward. However, in practice, I believe the board holds little leverage over Musk, with at least half of them being close allies.
Ultimately, a bet on Tesla (TSLA) is a bet on Musk’s ability to, once again, deliver something groundbreaking. I don’t think interfering with Musk is the right thing to do, even if it would appease some investors in the short term.
Geneva Investor: I believe Tesla’s board is unlikely to act against Musk due to the “Musk premium” on valuation. I think change could only come from Musk, possibly appointing a co-CEO or CEO to manage operations, like Jeff Bezos did at Amazon (AMZN).