- Elon Musk could face activist investors if Tesla stock falls, ex-Facebook exec warns
- Tesla shares are down more than 60% so far this year.
- On Thursday, a major Tesla shareholder said the company needs a CEO like Apple’s Tim Cook.
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Former Facebook security chief Alex Stamos warned that activist investors could start buying up Tesla stock — and even try to wrest control of the company from Elon Musk — if the electric-carmaker’s stock doesn’t reverse: They are down more than 62%. so far this year.
Activist investors buy large stakes in public companies and then advocate for change — sometimes in the boardroom.
“If it keeps dropping that sharply, eventually activist investors will come in, and those activist investors will push to get on the board and then pressure Musk — or maybe even remove Musk from stepping down as CEO,” Stamos said in one Episode of the “Moderated Content” podcast released Monday about Tesla’s big stock drop.
If an activist comes along — and there’s no indication so far — he could finally “put the brakes on Musk’s behavior,” Stamos said, citing his controversial tenure as Twitter boss. “That might be what kind of slaps him in the face about whether it’s worth doing,” Stamos said.
Musk and a Tesla spokesman did not respond to a request for comment from Insider ahead of the release. Stamos was previously Chief Security Officer at Facebook and also Chief Information Security Officer at Yahoo. Most recently, he spoke out against the rumblings of an activist investor trying to oust a founder when some people made noise that Mark Zuckerberg was about to be ousted from the top spot on Facebook in 2019.
Stamos made the comments after Musk made a series of erratic remarks on Twitter – from calling for the prosecution of White House Chief Medical Officer Anthony Fauci, to mocking the LGBTQ+ community, to insinuating that the former security chief of Twitter , Yoel Roth, have a liberal view of pedophilia. Stamos didn’t respond to Insider’s request for comment before publication.
Over the past week, Tesla shares have hit their lowest level since November 2020. Shares of the electric-car maker have plummeted more than 60% this year as demand from China slumped and Musk took to Twitter.
Last week, some Tesla investors expressed concern that Twitter had become too much of a distraction for the automaker’s CEO. Meanwhile, Musk sold more of his Tesla holdings to fund his $44 billion Twitter purchase on Wednesday — and has divested nearly $40 billion in Tesla stock over the past 14 months. Tesla stock was trading at just over $150 late Friday.
Stamos isn’t the only warning Musk could face a reckoning. On Wednesday, Tesla’s major shareholder Leo KoGuan called for a new CEO to take over. KoGuan has amassed about 22.6 million Tesla shares through September. Not much is known about how he spends his fortune, but he has been donating to Chinese universities for years, according to Bloomberg.
He called himself “Elon’s fanboy” in a Forbes interview last year, but has since changed his mind.
“An executioner like Tim Cook is needed, not Elon,” he said tweeted. KoGuan said an executive like the Apple CEO, known as the silent operational genius, would be a better fit, saying “Elon has left Tesla.”
On Monday, Wedbush tech analyst Dan Ives said Tesla is a ripe target for activist investors, adding that in 2023 the company is likely to face increased pressure from activist investors to launch a share buyback program that could hurt profit margins improve or take “strategic steps”. Ives has criticized Musk’s involvement with Twitter in the past. However, the tech analyst said in a note on Thursday that he is maintaining his outperform rating on the stock due to his optimism about the future of the electric vehicle industry.
William Klepper, a management professor who teaches an executive class at Columbia Business School, told Insider that unless Tesla’s board of directors steps forward and puts Musk’s focus back on Tesla, the company will be “infiltrated by activist investors.”
“The market is talking to the board,” Klepper said of Tesla’s recent share price decline. “As simple as that.”