Much has been said about Tesla's conference-call last week. We will not discuss the call in length. Elon Musk reported more huge losses - estimated at $23,000 per completed vehicle. Musk's then proceeded to cut-off questioning by investment analysts.
Analysts and investors alike are not amused. Shares have fallen by 8% this morning. The company has lost billions in market capitalization.
Musk' behavior has raised new questions about his leadership. He has been Wall Street's golden boy. So what happens when Musk loses a little luster?
One shareholder has a bold idea – strip Elon Musk of his Chairman of the Board of Directors title. The proposal was made by Jing Zhao, owner of 12 Tesla shares. Jing wants to replace Musk with an independent director with no direct relationship with the company. Musk would maintain his CEO title. The proposal will be voted upon at Tesla’s June 5 shareholders meeting in Mountain View, CA.
Tesla has come under increasing pressure from concerned shareholders, even before last night. The company missed several production targets for its Model 3 vehicle. Just last week, Musk was forced to stop production altogether to fix problems. Reports suggest Musk has been sleeping in the production facility as the problems persist.
At the same time Tesla is experiencing problems, Elon Musk is working on SolarCity, Hyperloop, the Boring Company, SpaceX and various other projects. Tesla investors are slowly losing patience with Musk.
For its part, Tesla issued a proxy statement in response to the Jing’s proposal. The Board of Directors recommended shareholders vote against the proposal. The statement specifically argued: “In light of the significant future opportunities for growth and the careful execution need in order to achieve it, the Board believes that the Company is best served by Mr. Musk continuing to serve as Chairman.”
The proposal will not prevail. The vote, however, will offer shareholders an outlet to send Musk a message. We will be watching to see how many shareholder-votes are cast for the proposal.