Alex Stamos was among others who predicted that activist investors would push Elon Musk from Tesla if Tesla stock falls further.
An ex-Facebook executive warns that Tesla’s stock could fall as activist investors target Elon Musk.
Alex Stamos, former Facebook security chief, warned that activist investors might start buying Tesla shares and even try to take control from Elon Musk. Tesla’s stock is down more than 62% this year.
Activist investors purchase large stakes in public companies, and then they agitate for change, sometimes in the boardroom.
“If it drops this hard, then then you’re likely to end up with activist investor getting in and those activist investors will push to get on the board and put pressure on Musk — maybe even to kick Musk off the CEO” Stamos stated about Tesla’s stock market drop in an episode on the podcast “Moderated Content”, which was published Monday.
Stamos stated that if an activist comes along, and there is no evidence of it happening, they could “be the brake upon Musk’s behavior.” He cited his controversial reign as Twitter chief. Stamos stated, “That might be what kind of slaps his face in the face whether or not it’s worth it to do that.”
Insider reached out to Musk and a Tesla spokesperson but they did not respond. Stamos was the Chief Security Officer of Facebook, and was also Chief Information Security Officer at Yahoo. When some were arguing that Mark Zuckerberg should be removed from his top Facebook seat in 2019, he spoke out against the rumblings of an activist investor trying oust a founder.
After Musk had made a series erratic statements via Twitter, including calling for Anthony Fauci to face trial and mocking the LGBTQ+ community, Stamos commented. He also suggested that Yoel Roth, Twitter’s former security chief, has a permissive view on pedophilia. Insider reached out to Stamos for comment but he didn’t respond.
Tesla shares have fallen to their lowest point since November 2020 in the last week. Due to falling demand from China, and Musk’s obsession with Twitter, the stock of Tesla has fallen more than 60%.
Some Tesla investors expressed concern last week that Twitter was becoming too distracting for their CEO. Musk also sold more Tesla holdings to finance his $44 billion Twitter purchase. This transaction saw him sell nearly $40 billion of Tesla stock over the last 14 months. Late Friday, Tesla stock traded at just over $150 per share.
Stamos isn’t the only one to warn that Musk may face a reckoning. Leo KoGuan, a major shareholder in Tesla, called Wednesday for a new CEO. As of September, KoGuan had 22.6 million Tesla shares. Although not much is known about his spending habits, Bloomberg reports that he has spent many years making donations to Chinese universities.
In an interview with Forbes last January, he called himself “Elon’s fanboy”, but has since changed his tune.
He tweeted, “An executioner Tim Cook-like, is required, not Elon.” KoGuan stated that an Apple CEO would make a better match, a quiet operations genius like Tim Cook, and said “Elon abandoned Tesla.”
Wedbush tech analyst Dan Ives stated Monday that Tesla is a prime target for activist investors. He also said that Tesla will likely face increased pressure in 2023 from activist investors to launch a stock purchase program, increase profit margins or make “strategic decisions.” Ives has previously criticized Musk’s obsession with Twitter. The tech analyst, however, stated in a Thursday note that he retains his outperform rating for the stock because of his optimism about the future of the EV sector.
Insider was told by William Klepper, a Columbia Business School management professor, that Tesla’s board must step up to bring Musk’s attention back to Tesla. If they don’t, activist investors will take over.
Klepper stated that Tesla’s stock price drop was due to “the market speaking to the board”. It’s as simple as that.
Business Insider has the original article.
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By: gkay@insider.com (Grace Kay)
Title: Elon Musk could lose control of Tesla if the automaker’s stock keeps tumbling, ex-Facebook security chief says
Sourced From: www.businessinsider.com/elon-musk-tesla-control-stock-ceo-alex-stamos-2022-12
Published Date: Sat, 17 Dec 2022 12:30:00 +0000
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