Despite Tesla’s recent stock surge and Elon Musk’s vow to step away from politics and refocus on the company, investor sentiment remains surprisingly bearish. But why exactly?

Big Exit: Gary Black Sells All His Tesla Shares

One of Tesla’s most vocal and well-known investors, Gary Black, announced he has fully exited his position in the company. For the first time since 2021, he no longer holds a single share. His reason? He believes the stock price has completely disconnected from Tesla’s fundamental value.

In a post on X, Black revealed he sold his last batch of shares at $358, stating that Tesla’s valuation has become unmoored from financial reality. His main concern is the company’s price-to-earnings ratio for 2025, which has skyrocketed to 188x, while earnings estimates keep falling — down 5% just last week, and down 40% since the start of the year.

He also noted that Tesla’s delivery numbers are weak, especially in April. He expects second-quarter deliveries to drop 12% year-over-year, and full-year deliveries to decline by 10% — worse than Wall Street’s more modest forecasts of 7% and 5% declines, respectively.

Doubts Over Robotaxi and New “Affordable” Car

Black also warned about the upcoming robotaxi test in Austin, calling it a one-sided risk. Even the much-discussed “affordable” car, expected in July, didn’t impress him. He believes it’s simply a stripped-down Model Y rather than a true game-changer that could open up new markets.

His new 6–12 month price target for Tesla stock is $310. That figure is based on a projection of 5.4 million vehicles delivered by 2030, $12 in adjusted earnings per share, and a 14.2% cost of equity. All factors considered, Black says the current price of $358 is too high.

Shareholders to Musk: Focus on Tesla and Show Up

In addition to financial concerns, a group of activist shareholders is now pressuring Musk to dedicate at least 40 hours a week to Tesla. In a letter sent to Board Chair Robyn Denholm, investors — including the SOC investment group — described what they call a deepening internal crisis.

Though these shareholders control only about 7.9 million of Tesla’s 3.22 billion shares, their concerns have been vocal. They blamed Musk’s political activities — especially his role in Trump’s DOGE government agency — for damaging the company’s reputation and contributing to plunging sales.

Tesla’s Reputation and Performance Take a Hit

Tesla’s most recent earnings report revealed a 71% drop in profit and a 13% drop in revenue year-over-year. The letter described the situation as a “crisis” and claimed the board is failing to act in shareholders’ best interests. It also cited global concerns about labor practices and a damaged brand image.

The letter goes beyond time demands. It calls for:

🔹 A clear succession plan in case Musk departs

🔹 A rule limiting board members’ external commitments

🔹 Appointment of a new independent director with no personal ties to current members

Scrutiny of the Board and Musk’s $56B Pay Package

Tesla’s board has long faced criticism for being too close to Musk. That dynamic became legally significant in December 2024, when a Delaware judge struck down Musk’s $56 billion compensation package, citing conflicts of interest — including the presence of his brother Kimbal on the board.

Some of the same shareholders behind the new letter were part of the campaign that challenged Musk’s 2018 pay plan. At the time, they warned Musk was too overstretched. Today, they repeat the same message:

“The board continues to allow Elon to be overcommitted, failing to demand he fulfill his role as CEO and ‘Technoking’ of Tesla.”

One-Minute Summary

Despite a recent rally in Tesla stock, investor confidence is shaky. Gary Black sold all his shares, citing overvaluation and falling earnings. Deliveries are declining, and planned projects like the robotaxi and low-cost vehicle don’t inspire much optimism. Meanwhile, shareholders are demanding Musk return to Tesla full-time and call the current state a crisis, criticizing the board for failing to act.

🤔 Does Elon Musk still have the focus and energy Tesla needs?



#Tesla , #ElonMusk , #stockmarket , #bearish , #Musk

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