Analysts said Musk’s apparent ultimatum to Tesla’s board to gain more control of the automaker could have a negative impact on its stock. Musk posted on his social media platform X on Monday that he was uncomfortable with transforming Tesla into a leader in artificial intelligence and robotics without 25% control of the company. “Unless this is the case, I would rather build products outside of Tesla,” Musk wrote. JPMorgan analyst Ryan Brinkman said Musk previously controlled about 25% of Tesla before selling shares in 2022 to fund the acquisition of Twitter. He currently controls about 13% of Tesla shares. Brinkmann told clients in a Tuesday research note that regaining 25% of the automaker would require “effective dilution of other investors’ holdings, possibly through the arrangement of a new compensation package.” Brinkman wrote that Musk’s demands would put pressure on the stock price because it would increase the likelihood that he would step down as CEO if he doesn’t get his way and increase the cost to shareholders of keeping him on. Jefferies analyst Philippe Houchois told clients in a research note on Tuesday that Musk’s demand also “increases the risk of near-term downgrades and further volatility” as Tesla’s valuation Value multiples already take into account the sharp rise in non-automotive activity. Investors may begin to question Musk’s recent track record at Tesla, Hojois wrote. Hojos said they will question Musk’s dilution of Tesla shareholders by financing the Twitter acquisition, as well as his questionable strategy and product priorities over the past two years that have hurt growth, returns and management Cohesion. Investors may also question Tesla’s corporate governance now that they are learning about Musk’s salary issues on social media, Brinkman wrote. Still, Jeffries expects Tesla’s board to approve another executive super-pay package to bring artificial intelligence development within Tesla’s scope, Joyce Hu wrote. Jeffries currently has a hold rating on Tesla stock and a price target of $225, which would represent a 2.3% upside from Tuesday’s closing price of $219.91. JPMorgan Chase has an underweight rating on Tesla, with a target price of $135, a sharp drop of 38% from yesterday’s closing price.
