Sen. Elizabeth Warren (D-Mass.) has renewed her battle with Elon Musk, the CEO of Twitter and Tesla, expressing concerns that he has failed in his legal responsibilities to the carmaker.
“That responsibility includes ensuring that Mr. Musk is an effective CEO and that he fulfills his legal obligation to act in the best interests of Tesla and all of its shareholders, not just himself,” she wrote. “The fact that Mr. Musk was, until recently, the world’s richest man does not absolve him of those legal responsibilities or provide assurances that he will meet them.”
Warren requested responses to her questions regarding how the board is handling possible conflicts of interest, misappropriation of corporate assets, and “other actions by Mr. Musk that appear not to be in the best interests of Tesla and its shareholders.” She cited multiple media reports that Musk has saddled Tesla with billions in debt, including $1 billion in annual interest payments, and used Tesla employees to improve the social media platform.
The senator raised other concerns, warning that Musk could be incentivized to maximize advertising agreements on Twitter with Tesla rivals. However, Musk might choose the opposite approach by adjusting the Twitter algorithm to praise the Tesla brand.
Hate speech is another issue that may hurt Tesla’s brand, Warren said.
“Under Mr. Musk’s leadership, Twitter has welcomed hate speech and sharply increased use of racist language, while advancing a broader platform for Nazis, virulent sexism, and climate misinformation,” she said. “That association between Tesla’s CEO and the actions of Twitter could have an impact on the Tesla brand and its ability to market its vehicles to its target audience.”
Warren requested a response from Denholm by Jan. 3.
Musk hasn’t been shy in sharing his criticisms of Warren.
“You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason,” Musk wrote.
“Please don’t call the manager on me, Senator Karen,” he later tweeted.
Investors Want Musk to Refocus on Tesla
Tesla stock has been sliding since it was revealed this past spring that Musk had become the largest shareholder of Twitter. Over the past three months, the electric vehicle maker’s shares have tumbled 56 percent.Year to date, Tesla is down close to 69 percent.
Many prominent Tesla investors have expressed concern about the company.
“Why do @GerberKawasaki and I complain so much? As long-term investors, we both see the immense value in the $TSLA business, we don’t want to sell the stock, and as media people we both want desperately to help @elonmusk with the branding issues he’s taken on in buying Twitter,” Black wrote in a Dec. 22 tweet.
“In April, I was one of the few on this board who argued loudly why Elon should not buy TWTR. So many others here supported his intent to purchase. All of the reasons I gave then have come to fruition.”
Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management and a longtime Tesla bull, revealed that he would run for Tesla’s board.
“It is inaccurate to suggest that I want a new CEO at Tesla. The whole point of all of this is I want Elon’s focus back at Tesla, focused on the challenges that Tesla faces in 2023, launching new products and scaling rapid growth,” he wrote in a tweet. “I love Tesla and support Elon but I’m not OK with the way things are going down. I’m also extremely unhappy the Tesla BOD [board of directors] has done nothing to protect shareholders.”
“Advertisers are back at Twitter. New feed looks good with gold checks and square pics for companies, blue and round for humans. Product is definitely improving. Verification and creator tools big upside with new features,” he said on Dec. 22.
Musk has sold approximately $23 billion worth of Tesla stock this year, including a recent $3.6 billion.