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A
defiant Musk took to Twitter on Wednesday afternoon to suggest
the investors buy stock in Ford Motor Co <F.N> instead. The Ford
family controls the Detroit automaker through two classes of
stock.
In a letter dated Monday, five investment groups including the
California State Teachers Retirement System, Hermes Equity
Ownership Services and CtW Investment Group urged Tesla to have
all of its directors re-elected annually.
"We expect that as companies make the transition to
publicly-traded status, the governance structures and practices
in place at the time of the IPO will evolve to align with the
company's changing strategy," the letter reads. "However,
Tesla's seven-member board is largely unchanged from its pre-IPO
days."
Led by the enigmatic Musk, Tesla recently became the most
valuable U.S. car company, passing General Motors Co <GM.N> for
the top spot.
Tesla's market value has since slipped to just shy of GM's. As
of Wednesday, the market cap of the Silicon Valley automaker was
$50.3 billion, while GM's was $50.8 billion.
"This investor group should buy Ford stock," Musk posted on
Twitter on Wednesday afternoon. "Their governance is amazing..."
Musk then said on Twitter that he would follow up soon on an
earlier promise to appoint more independent directors, "but this
(investor) group has nothing to do with it."
Over the past month, Tesla stock has surged 35 percent as
investors bet that Musk will revolutionize the automobile and
energy industries. The shares closed down 3.8 percent at $296.84
in Wednesday's trading on Nasdaq, however.
Among those on Tesla's board is Kimbal Musk, the CEO's brother,
and Brad Buss, who served as chief financial officer at
SolarCity Corp, which the electric car maker acquired last year.
The $2 billion stock deal for the money-losing installer of
residential solar power systems, prompted a 13 percent fall in
Tesla's share price after Musk outlined it last June.
The Palo Alto, California-based company is rushing to launch its
mass-market Model 3 sedan in the second half of this year and
quickly ramp up its factory to hit a production target of
500,000 cars per year in 2018.
Last year Tesla sold 76,230 vehicles, missing its target of at
least 80,000 cars sold. By comparison, GM sold 10 million cars
and Ford sold 6.7 million.
(Additional reporting by David Shepardson in New York, Vishal
Sridhar in Bengaluru; Editing by G Crosse and Tom Brown)
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