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Six years ago, Tesla <a href="https://www.washingtonpost.com/news/on-leadership/wp/2018/01/23/elon-musks-new-pay-package-could-theoretically-be-worth-55-8-billion-but-none-of-its-guaranteed/" target=_blank>outlined</a> an ambitious compensation package for its chief executive that made Elon Musk one of the wealthiest men alive, and investors were all <a href="https://x.com/GerberKawasaki/status/976817186298720257?s=20" target=_blank>for it</a>. Now, the world’s richest person’s desire for more control over the company is facing skepticism from those same quarters.

“Him asking for stock, the whole thing’s absurd,” Ross Gerber, a longtime investor and Musk ally, said in an interview, after issuing a stark conclusion: “I’m very grateful for the Tesla investment I made 10 years ago. We’ve reached a point as a firm, and me personally, where I feel the story is played out.”

While Gerber hasn’t pulled out of Tesla, he has tempered expectations about the company’s future — and become a vocal critic of Musk, one of the most vivid examples of mounting frustration with the entrepreneur regarded as brilliant but erratic. Since Musk this month requested a 25 percent stake in Tesla to avoid “a takeover by dubious interests,” investor patience has shown signs of wearing thin with the risks Musk has taken with his own fortune — and theirs. Gerber’s turning point was when he received outreach from hordes of Tesla investors seeking to pull out of the company after Musk fired off an antisemitic tweet in November.

A little more than a year ago, Musk <a href="https://www.sec.gov/Archives/edgar/data/1318605/000089924322035390/xslF345X03/doc4.xml" target=_blank>sold</a> billions in Tesla stock as he scrambled to finance his $44 billion purchase of Twitter, where he promptly gutted the social media company’s workforce, ditched the ubiquitous bird logo and rebranded it as X. Two months ago, advertisers began boycotting the platform after Musk put up the antisemitic post.

Amid that controversy, Musk launched a campaign to persuade Tesla shareholders to restore his stake in the company, saying his <a href="https://www.nasdaq.com/articles/how-much-tesla-stock-does-elon-musk-own-and-what-other-companies-does-he-control" target=_blank>current</a> 13-percent <a href="https://www.sec.gov/Archives/edgar/data/1318605/000089924322038522/xslF345X03/doc4.xml" target=_blank>holding</a> could leave him with “so little influence” as to be “essentially voted out” — making him reluctant to consolidate his artificial intelligence bets at Tesla. Musk’s vast empire includes a separate AI company called xAI.

His plea coincided with a devastating earnings report in which Tesla revealed that its revenue was stagnating in the face of steep price cuts that generated growth in sales volume. On top of that, the company forecast a potentially “notably lower growth rate” for 2024. The following day, Tesla’s stock plummeted by 12 percent, wiping out tens of billions of its value.

“I understand conceptually what he’s doing” by asking for more control, said Dan Ives, an analyst with Wedbush Securities who often touts Tesla and Musk, but set off a frenzy by dubbing the earnings call a “train wreck.” “The timing’s the issue.”

Musk and X did not respond to multiple emailed requests for comment.

Meanwhile last week, Tesla investor Nell Minow, who serves as vice chair of ValueEdge Advisors, put out a note to clients — including large investors — questioning Musk’s request for a larger stake of the company that he hadn’t earned.

“I said it was somewhere between a 2-year-old tantrum and a gangster saying it would be too bad to have a brick thrown through your candy store window,” Minow said in an interview, likening Musk’s plea for more control to “extortion.”

“He is threatening to take away from the company something that already belongs to the shareholders,” she said. “He can’t do that any more than he can say, ‘I’m taking all the computers home with me.’”

Gene Munster, managing partner at Deepwater Asset Management, said Musk’s quest for greater control is valid, even amid “the most sobering guidance I’ve seen from Tesla.”

“His sales have diminished his voting rights,” Munster said. But “this is his baby and he wants control of it.”

Musk <a href="https://x.com/elonmusk/status/1457067398712942592?s=20" target=_blank>doesn’t take</a> a traditional salary at Tesla, so added shares and rising stock prices are how he increases his net worth, estimated to be $199 billion, <a href="https://www.bloomberg.com/billionaires/" target=_blank>according to</a> the Bloomberg Billionaires Index. Musk faces steep annual tax bills on his stock sales, which include capital gains, and investors fear he may soon have to dip into his Tesla stake even further to pay the tab.

The rift between Musk and Gerber, who heads Gerber Kawasaki Wealth &amp; Investment Management, is particularly telling. A longtime Musk defender who overlapped with the entrepreneur at the University of Pennsylvania, Gerber said he’s grown disaffected as Musk has appeared to put other priorities ahead of Tesla.

Gerber said he grew concerned when Musk began pursuing Twitter — a complicated courtship that ended with the entrepreneur being forced to make good on his $44 billion offer, which many viewed as way too much.

“He offered a premium for a troubled company that was such a good deal without any due diligence requirement that the board had to take that deal,” Gerber said.

But the real break in their relationship came in November, when Gerber’s phone started buzzing nonstop: Investors in his management fund wanted to pull their money out of Tesla.

When Gerber checked Musk’s feed on X, he understood why: Musk had just elevated to his millions of followers a conspiracy theory claiming that Jewish communities promote “hatred against whites.” Investors had tolerated plenty from Musk, but they weren’t willing to fund antisemitism.

Gerber has regularly appeared on national television in support of Musk, but now he said the entrepreneur needed a dose of reality. Gerber lit into Musk publicly for putting Tesla at risk.

“It takes a lifetime to build a reputation, and a day to lose it,” Gerber wrote in one <a href="https://x.com/GerberKawasaki/status/1725219518186995834?s=20" target=_blank>tweet</a>, before <a href="https://x.com/GerberKawasaki/status/1725221803864572102?s=20" target=_blank>lamenting</a> that Musk “is not working on the mission at all!” and the “party seems to be ending” for Tesla <a href="https://x.com/GerberKawasaki/status/1725224994983022602?s=20" target=_blank>investors</a>.

Musk responded by blocking Gerber on the platform — an ironic move for “a guy who’s the champion of free speech,” Gerber said, calling it “essentially retaliation.”

As X faced the fallout from the claims that Musk was antisemitic, Gerber <a href="https://x.com/GerberKawasaki/status/1732897992125149257?s=20" target=_blank>appealed</a> to X chief executive Linda Yaccarino, suggesting that the company work with Anti-Defamation League, an activist organization that had <a href="https://www.washingtonpost.com/technology/2022/11/02/musk-twitter-bans-trump/" target=_blank>met with Musk</a> previously to make a case for content moderation.

“Hi Ross- I agree that the ADL is one of the best,” she <a href="https://www.washingtonpost.com/technology/2022/11/02/musk-twitter-bans-trump/" target=_blank>wrote</a> privately in response. “We are in touch weekly and a great partner. We reached out and will partner at a later date.”

Her praise of ADL was surprising given that Musk had <a href="https://x.com/elonmusk/status/1698757795259060562?s=20" target=_blank>threatened</a> to file a defamation lawsuit against the organization over its claims of antisemitism on X, and less than a month before their exchange had <a href="https://x.com/elonmusk/status/1724896736412660188?s=20" target=_blank>said</a> it should rename itself to the “Defamation League.”

On a more personal note, Yaccarino updated Gerber on efforts to assist with his concerns about impersonation on X. But she failed to respond to another request.

“Can you get elon to stop blocking me,” Gerber wrote via DM. “Im an investor in X and was there for Elon every time hes fallen. Im trying to help him from continuing to fall on his sword.”

University of Nebraska-Lincoln

Faiz Siddiqui is a technology reporter with The Washington Post's Business Desk covering companies such as Tesla and Twitter. His area of coverage has also included ride-hailing and the race to build autonomous cars. Prior to that, he covered the D.C. Metro and local transportation scene.

Faiz Siddiqui

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Tesla investors are resisting Elon Musk’s push for more control

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FILE PHOTO: Tesla CEO and X owner Elon Musk attends the VivaTech conference in Paris

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Elon Musk’s uphill battle to win greater control of Tesla

Once, Musk could do no wrong among Tesla investors. But after a couple of rocky years, reaction to his pitch for greater ownership has been cold.