In a sharp exchange that quickly captured attention on Wall Street, tesla CEO Elon Musk publicly told Wedbush Securities analyst Dan Ives to “Shut up” on Tuesday. The blunt rebuke came after Ives, a prominent Tesla bull, posted several pointed recommendations for the electric vehicle giant’s board on X (formerly Twitter). This public confrontation highlights escalating tensions around Tesla’s governance and musk’s various ventures.
Dan Ives holds one of the most optimistic outlooks on Tesla shares among analysts tracked by FactSet, boasting a $500 price target. Despite his generally positive stance, Ives recently voiced critical remarks regarding Musk’s political activities. These comments followed a weekend announcement from Musk that he planned to form a new political entity, the “America Party,” specifically to challenge Republican candidates who supported a particular spending bill.
The backdrop to Ives’ public commentary was a significant decline in Tesla’s stock. On the preceding Monday, the share price slid by nearly 7%, wiping out an estimated $68 billion in market capitalization. This downturn was partly attributed to concerns swirling around Musk’s political endeavors and rhetoric.
In his X post, Ives proposed three key actions for the Tesla board. Firstly, he recommended creating a new compensation package for Musk that would grant him 25% voting control and potentially facilitate a merger with his artificial intelligence company, xAI. Secondly, Ives called for establishing “guardrails” to define and limit the amount of time Musk allocates to Tesla responsibilities. Finally, he urged the board to provide “oversight on political endeavors.”
Following up on the X post, Ives and other analysts from his firm published a lengthier note titled, “The Tesla board MUST Act and Create Ground Rules For Musk; Soap Opera Must End.” In this note, they asserted that Musk’s move to launch a new political party represented a “tipping point in the Tesla story.” This, they argued, necessitated immediate action by the company’s board to better manage the CEO’s activities and focus. Despite this strong criticism, Wedbush maintained both its $500 price target and its “buy” recommendation for Tesla stock.
Musk’s response on X was characteristically direct: “Shut up, Dan.” This retort came despite the fact that Ives’ first suggestion – granting 25% voting control – aligns with a level of influence Musk has openly stated he seeks at Tesla. When asked for comment by CNBC via email, Ives responded, “Elon has his opinion and I get it, but we stand by what the right course of action is for the Board.”
The Broader Context of Governance and Pay
This public spat unfolds against the complex backdrop of Elon Musk’s compensation and governance at Tesla. Musk’s historic 2018 CEO pay package, once valued at around $56 billion and significantly appreciating since, was nullified last year. The Delaware Court of Chancery, under Judge Kathaleen McCormick, ruled that Tesla’s board members lacked sufficient independence from Musk and failed to negotiate the package properly. Tesla is currently appealing this decision to the Delaware state Supreme Court while simultaneously working to determine the structure and components of Musk’s next potential compensation agreement. The calls for board action and structured oversight from analysts like Ives directly intersect with these ongoing discussions about executive compensation and corporate governance at Tesla.
Analyst Concerns Extend Beyond Ives
Dan Ives isn’t the only prominent Tesla supporter expressing concerns about Musk’s increasing political activism. Analysts at investment firm William Blair downgraded their rating on Tesla stock from the equivalent of a “buy” to a “hold” on Monday. They cited Musk’s political plans and commentary as a key factor in their decision. Additionally, they pointed to potential negative impacts that the recent congressional spending bill could have on Tesla’s profit margins and electric vehicle sales.
The William Blair analysts articulated their position clearly. They stated, “We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics.” They added a specific recommendation for Musk’s focus, suggesting, “We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture.” This sentiment underscores a growing feeling among some investors and analysts that Musk’s attention is being pulled away from Tesla’s core business and strategic initiatives, potentially impacting operational execution and future growth.
Another notable figure in the investment community, James Fishback, CEO of hedge fund Azoria Partners and a self-proclaimed Trump supporter, also voiced his apprehension. Fishback announced on Saturday that his firm had postponed the listing of an exchange-traded fund (ETF), the Azoria Tesla Convexity ETF, which was designed to invest in Tesla shares and options. His post on X began with the stark statement, “Elon has gone too far.”
Fishback directly addressed the company’s leadership, stating, “I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO.” This adds further weight to the calls for greater board oversight and clarity on Musk’s commitment to his role at Tesla amidst his expanding interests.
Musk’s Political Ambitions
Elon Musk himself confirmed his intention to form the “America Party” on Saturday. He stated that the party’s goal would be to give Americans “back your freedom.” However, details about the party remain sparse. Musk has not yet shared formal information regarding its registration location, the level of funding he plans to provide, or which specific candidates he intends to support. His recent political activity follows a period in the first half of the year where he worked with the Trump administration, advocating for a significant downsizing of the federal government. That official collaboration ended in May, preceding the recent public disagreement between Musk and Trump over the spending bill and other issues.
Tesla’s stock performance reflects some of these broader market anxieties. The stock is currently down approximately 25% year-to-date. This performance significantly lags behind major U.S. market indexes and represents the weakest showing among the cohort of tech’s megacap companies. The public conflict with a high-profile analyst like Dan Ives, coupled with the continued focus on Musk’s external activities, may further contribute to investor uncertainty regarding the company’s immediate future trajectory and stability. Neither Musk, Tesla board chair Robyn Denholm, nor investor relations representative Travis Axelrod immediately responded to requests for comment regarding these developments.
Frequently Asked Questions
What specific proposals did Dan Ives make for the Tesla board?
Wedbush analyst Dan Ives proposed three key actions for the Tesla board on X. First, he suggested a new compensation package for Elon Musk that would grant him 25% voting control and potentially pave the way for a merger with xAI. Second, he called for establishing clear “guardrails” to limit the time Musk dedicates to Tesla. Third, he recommended board oversight on Musk’s political activities. These proposals were made following a drop in Tesla’s stock partly attributed to Musk’s recent political actions.
Why are some Tesla analysts criticizing Elon Musk’s political activities?
Analysts like Dan Ives, William Blair, and James Fishback are criticizing Elon Musk’s political focus primarily because they believe it distracts from his crucial role as Tesla CEO at a critical time for the business. They worry that his attention is being diverted from key initiatives like the robotaxi rollout. They also express concern that his political rhetoric and the formation of a new party could negatively impact the company’s brand, investor sentiment, and potentially its operational or sales performance.
How might this conflict impact the situation with Elon Musk’s pay package?
This public conflict adds another layer of complexity to the ongoing situation with Elon Musk’s voided 2018 pay package. Tesla is appealing the court decision and determining the terms of a new potential package. Analyst calls for increased board oversight and structuring Musk’s time and political activities are directly related to corporate governance concerns raised by the court. The debate around voting control, as proposed by Ives and sought by Musk, is also central to negotiating any new compensation deal. This conflict could potentially influence the board’s approach to designing and presenting a package that addresses both Musk’s requirements and investor governance expectations.
