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Elon Musk 'blackmailing' investors in seeking more control: Ross Gerber

Jan 17, 2024 - markets.businessinsider.com
Elon Musk's demand for a larger stake in Tesla in exchange for keeping his AI project within the company has been labeled as "blackmail" by long-time investor Ross Gerber. Musk, who currently owns around 13% of Tesla, stated he was uncomfortable developing new projects unless his stake was increased to at least 25%. Gerber argues that Musk's demand for an additional $30 billion is illogical, considering his current stake is worth around $150 billion.

Gerber also disputes the notion that Musk lacks control over Tesla, pointing out that the board consists of Musk's friends and family members, effectively making the company 100% controlled by Musk. Musk's AI firm, xAI, which was launched last year, aims to raise $1 billion in an equity offering and has already secured $135 million from investors.

Key takeaways:

  • Elon Musk's demand for more control of Tesla in exchange for keeping AI projects within the company has been termed as 'blackmail' by long-time investor Ross Gerber.
  • Musk stated he was uncomfortable developing new projects at Tesla unless his stake was raised to at least 25%.
  • Gerber argues that Musk already has control over Tesla, owning 13% of the company, a stake worth around $150 billion, and his stock options make his current stake closer to 20%.
  • Musk launched an artificial intelligence firm last year called xAI, which aims to raise $1 billion in an equity offering, and has already secured $135 million from investors.
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