Elon Musk’s social-media comments spark Tesla investor backlash

The controversy over Elon Musk’s comments on the social-media platform X reached the board of Tesla this week. 

Several prominent Tesla investors are speaking out after Musk, the car maker’s chief executive, last week called an antisemitic post “the actual truth.” 

A trustee for the New York City public pension funds sent a letter to Tesla’s Board Chair Robyn Denholm Monday, urging her and other board members to hold Musk accountable for his recent actions and ensure they don’t harm the company. The city’s retirement systems held about $946 million in Tesla shares as of September.

ELON MUSK SAYS X USERS ADVOCATING FOR ‘GENOCIDE OF ANY GROUP’ FACE SUSPENSION AFTER ANTISEMITISM ALLEGATIONS

In the letter, New York City Comptroller Brad Lander, who along with being a trustee is also an investment adviser for the city pension funds, described Musk’s comments as “abhorrent.” 

“We are deeply concerned that his hateful statements on X will have material negative reputational and financial effects on Tesla,” Lander wrote.

Lander cautioned that a failure to address Musk’s behavior could cause cultural and reputational damage for the carmaker. “If the Board takes no action against Mr. Musk, it sends a message to all Tesla employees that the behavior of the company’s CEO is unassailable,” he wrote.

In this photo illustration, logo of ‘xAI’ is displayed on a mobile phone screen in front of Elon Musk’s photo in Ankara, Turkiye on July 13, 2023.  ((Photo by Hakan Nural/Anadolu Agency via Getty Images) / Getty Images)

 ELON MUSK BRINGING HEADLINES BACK TO X, MARKING MAJOR U-TURN

Several smaller Tesla shareholders also publicly criticized Musk’s post last week. 

Nia Impact Capital, which held around $296,000 in Tesla shares as of June, released a statement last week saying it was “appalled” by Musk’s post. The social-impact fund also called on Tesla’s board to address what it described as a violation of the company’s code of business ethics.

A day after Musk’s controversial comment, Tesla investor and longtime backer Ross Gerber posted on X saying he planned to replace his Tesla Model Y crossover with a Rivian electric vehicle next year. 

The White House has also condemned Musk for what it described as his “abhorrent promotion” of antisemitism. 

Musk, who is Tesla’s largest shareholder, has said he isn’t antisemitic and criticized media coverage of his actions. “I wish only the best for humanity and a prosperous and exciting future for all,” he said in a Sunday post. 

FILE PHOTO: Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16 (REUTERS/Gonzalo Fuentes/File Photo / Reuters Photos)

Neither Tesla nor Denholm responded to a request for comment. Tesla board member Kimbal Musk  posted Tuesday in support of his brother, saying on X, “Elon is not an antisemite.” 

Earlier this week, X sued left-leaning Media Matters for America, saying the media watchdog group, which reported finding ads near antisemitic content on the X platform, was trying to drive advertisers away. The president of Media Matters has called the lawsuit “frivolous” and said the group stood behind its work. 

The investor pressure at Tesla adds to the challenges the electric-vehicle maker is already facing, including higher interest rates, cooling demand for its models and growing competition in the EV space. 

Tesla’s share price fell 3.8% last Thursday, the day after Musk commented on the antisemitic post, but had largely recovered as of Tuesday, when it closed at $241.20. The stock price has nearly doubled this year. 

Elon Musk’s relationship with X, formerly known as Twitter, has caused several Tesla controversies over the years.  

Last year, as Musk was pursuing a takeover of the social-media company, some Tesla shareholders worried he was stretching himself too thin, not focusing enough on the carmaker and damaging Tesla’s brand image. Some aired those concerns publicly.

Musk’s tweets have on occasion drawn regulatory scrutiny and sparked lawsuits. 

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Musk and Tesla agreed in 2018 to each pay $20 million to settle with the Securities and Exchange Commission over tweets in which Musk floated the possibility of taking Tesla private. 

Lander, the New York City comptroller, cited the episode in his letter Monday.

Earlier this year, a jury in San Francisco rejected investor claims that those tweets violated federal securities law. Musk also prevailed in a 2019 trial over tweets in which he suggested a British spelunker was a pedophile. A Los Angeles jury found the comments didn’t constitute defamation.