The divergent reactions from two prominent investors highlight the volatility surrounding Tesla’s stock price and the influence of CEO Elon Musk on the company’s performance.
Cathie Wood, known for her bullish stance on Tesla, continues to buy the stock despite its declining value. This suggests her confidence in the company’s long-term potential, even amidst short-term fluctuations.
On the other hand, Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, expresses concerns over Musk’s leadership and its impact on Tesla’s stock price. Gerber believes that much of the stock’s decline could be reversed if Musk adjusted his behavior or if Tesla had a new CEO who could positively influence the company’s direction.
Gerber’s frustration with Musk’s level of control over Tesla is not new. He has previously criticized Musk’s dominance over the company, highlighting the significant influence Musk wields despite owning only a fraction of the shares. According to Gerber, Tesla is effectively “100% controlled by Elon” due to his tight grip on the board.
The decline in Tesla’s stock price, reaching a 10-month low of $160 a share, reflects the company’s turbulent journey in the stock market. From a peak of $407 in November 2021, the stock has experienced a significant downturn, down 30% for the year and plunging about 60% since its high in late 2021.
Overall, the contrasting views of Wood and Gerber underscore the uncertainty surrounding Tesla’s future and the significant role Musk plays in shaping its trajectory.
Ross Gerber’s recent comments reflect a shift in his stance towards Elon Musk and Tesla. While Gerber previously expressed belief in Tesla’s long-term growth potential and Musk’s position at the company, he has become increasingly critical of Musk’s activities outside of Tesla, particularly his involvement in social media and his efforts to seek an unprecedented pay package.
Gerber has advised Musk to “just shut up,” indicating his frustration with Musk’s behavior and its impact on Tesla’s reputation and performance. He believes that Musk’s distractions, such as his involvement with Twitter and the legal battle over his pay package, have affected Tesla’s demand and profitability. Gerber highlights that the original narrative investors bought into with Tesla did not include Musk’s controversies and distractions.
In contrast, Cathie Wood and her fund ARK Invest have remained staunch supporters of Tesla and Musk. Despite the challenges Tesla has faced, Wood has continued to back the company and has even increased her position during periods of stock decline. She views the slowing demand for electric vehicles, particularly among traditional automakers, as an opportunity for Tesla to gain market share.
Wood’s positive outlook on Tesla is rooted in her belief in Musk as a problem solver and innovator. She sees Musk’s intensity and creativity as key drivers for Tesla’s progress, particularly in achieving goals like autonomous vehicles, which Wood considers a “game changer.”
The relationship between Musk and Wood appears to be positive, with the two engaging in public conversations and Wood praising Musk’s abilities. However, Gerber’s criticisms highlight the divergent views within the investor community regarding Musk’s leadership and its implications for Tesla’s future.