Elon Musk's Tesla Ownership Remark Is 'Just More Drama' And 'Won't Bear Fruit... Musk Is Tesla And Tesla Is Musk,' Analyst Says

A leading Tesla Inc TSLA analyst breaks down what CEO Elon Musk‘s recent comments on pay and increased control over the company could mean for the electric vehicle (EV) manufacturer.

The Tesla Analyst: Wedbush analyst Dan Ives has an Outperform rating and $350 price target on Tesla.

The Analyst Takeaways: Musk recently said he would like to have increased control of the EV maker if he is to advance artificial intelligence (AI) products within the company

See Also: Elon Musk Seeks Greater Control Over Tesla As AI Endeavors Multiply: ‘Enough To Be Influential…’

"I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can't be overturned," Musk said on Twitter.

Musk, who currently owns over 12% of Tesla, said he was also in favor of a dual-class voting structure.

Musk’s comments created a firestorm, according to Ives.

"It's no secret and a key to our bullish thesis that all AI initiatives be kept within Tesla from Dojo to Optimus to FSD to various robotaxi and other robotic developments," Ives said.

The analyst said that if Musk created next-generation artificial intelligence projects outside Tesla, it "would clearly be a big negative for the Tesla story."

Musk’s new compensation package is likely being held up in the Delaware court system, Ives says.

"The Board and top shareholders are well aware of this dynamic and ‘key man risk' with Musk especially around AI with the AI Revolution on the doorstep for the tech industry and Tesla,” Ives wrote.

Ives said one problem around the ownership structure is the fact that Musk sold Tesla shares to help fund his acquisition of Twitter. Before selling shares for the acquisition, Musk owned around 22% of Tesla, Ives notes.

"We believe the Board and Musk will be able to resolve this issue over the next 3-6 months and ultimately all AI initiatives will be kept within Tesla."

Ives said the comments and battle are "just more drama in the Tesla story that will not bear fruit." The analyst said the latest battle gives the "bears something to run with" and could be a distraction for shares.

"Musk is Tesla and Tesla is Musk and AI is a key to the future of Tesla."

TSLA Price Action: Tesla shares are down 3% to $212.43 on Tuesday versus a 52-week trading range of $124.31 to $299.29. Shares of Tesla are up 77% over the last year and up over 880% over the last five years.

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