Ross Gerber Says Elon Musk Is 'Blackmailing' Investors By Seeking To Boost Stake: 'He Controls Tesla More Than Anybody Controls Any Company'

Elon Musk has been accused of attempting to “blackmail” investors into giving him more control over Tesla Inc TSLA by a long-time Tesla bull, Ross Gerber.

What Happened: In an interview with CNBC on Tuesday, Gerber criticized Musk’s recent comments about increasing his stake in Tesla. Musk had expressed discomfort with developing projects in robotics and artificial intelligence at Tesla unless his ownership stake was raised to at least 25%. Gerber labeled this as “blackmail” of Tesla’s investors, reported Business Insider.

"He seems to be blackmailing the Tesla shareholders, saying he won't build stuff for us unless he gets another $30 billion, which ironically was exactly how much money he sold of $TSLA stock to buy the platform that he's tweeting on," says @GerberKawasaki on @elonmusk. pic.twitter.com/WgjgHVX0l3

— Last Call (@LastCallCNBC) January 17, 2024

Despite already owning 13% of the company, Musk is seeking to increase his stake, which Gerber finds “absurd.” Musk’s control over Tesla is further solidified by the board, which Gerber claims is composed of Musk’s friends and family.

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“The idea that he doesn’t control Tesla when everybody on the board is a friend or family member of his, is the part I’m really pushing back on. He controls Tesla more than anybody controls any company,” Gerber said.

Why It Matters: This is not the first time Gerber has been critical of Musk’s moves. Gerber, in an interview with Yahoo Finance, also suggested that if Musk wants a 25% voting stake in Tesla, he should buy the stock like the rest of us. He found the idea of shareholders granting Musk $30 billion worth of stock confusing, emphasizing that, as the CEO, Musk’s “fiduciary duty” is to transform Tesla into an AI/robotics company—a task for which he has already been compensated $50 billion.

Earlier this month, Gerber described the potential integration of Musk’s Grok AI into Tesla vehicles as a “total conflict” and a “huge negative” for shareholders. He also expressed his disappointment over the lack of a large language model (LLM) on his Tesla screen, comparing it to other automakers who had already integrated LLM into their vehicles’ voice assistants.

Gerber has also been vocal about his critic of Tesla’s products. In December, he announced that he was “bored” of Tesla’s Model Y and replaced it with a Rivian R1S SUV. He later described the Rivian vehicle as a “wonderful EV,” acknowledging that Tesla has a “huge tech moat,” but high-end EV buyers are choosing Rivian in Los Angeles.

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