Elon Musk Tells Angry Tesla Investors To Buy Ford Stock
No word yet on whether this was serious or just snark.
On Tuesday, an investment group that owns 200,000 shares of stock in Tesla Motors expressed its displeasure with Elon Musk's company and its proposed acquisition of Solar City. The letter the group sent to Tesla drew the ire of Elon Musk, who took a shot at them via Twitter.
CtW Investment Group sent a letter to Tesla and Musk expressing some concerns they had. Their grievances were with the make up of Tesla's Board of Directors and how they are handling a bid to take over Solar City.
Reuters reports that the letter contained a five step plan they wanted Tesla to enact.
In addition to adding two permanent independent directors and separating the chairman and CEO roles, CtW called for two independent directors to form a special committee to review the proposed SolarCity deal; a declassification of the board so that stockholders may have an annual say on the election of all directors; and revision of the corporate governance guidelines to forbid that immediate family members of board members serve concurrently on the board.
As for that final point, if you were unaware, Elon's brother, Kimbal Musk, is a Tesla board member.
In the letter criticizing Tesla's governance, CtW Executive Director Dieter Waizenegger said, "We believe the board of directors at Tesla must be restructured in order to insure that stockholder interests are protected during this proposed acquisition and going forward."
Besides CtW's issues with the Tesla Board, their 200,000 shares give them a significant financial stake to protect. Tesla's stock dropped about 13 percent in the days after the Solar City takeover was announced on June 21, 2016.
On June 21, Tesla stock closed at $219.61 per share. After a few day of declines, on June 24, it closed at $193.15 before going back up again. The stock recovered to its pre-Solar City announcement price in August, but fell again, hitting a low of $184.15 on November 14.
Taking into account only the overall price difference from June 21 to November 14 of a loss of $35.46 per share, on paper, CtW lost $7,092,000.00. That seems substantial.
That is, until you look at the big picture, which is how investing works. Today, on April 13, Tesla closed at $304.00 per share. The gain between June 21 and today is $84.39 per share. This means CtW made, at least on paper, $16,878,000.00. That is substantial.
I guess you can't please everyone, even when you make them almost $17 million.
I could find no statement from Ford on how their governance compares to that of Tesla's.
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