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Down Fall of Elon Musk? Stocks Slide Amid CEO Pay Controversy

EconomyDown Fall of Elon Musk? Stocks Slide Amid CEO Pay Controversy
© News1

As the re-vote for Tesla CEO Elon Musk’s salary proposal approaches, Tesla’s stock price has been plunging daily. This has led to speculation about how far it might fall, becoming one of the market’s most significant concerns.

On June 11, Tesla recorded $170.66 on the New York Stock Exchange, a 1.80% decrease from the previous trading day.

Yahoo Finance

The further drop in the stock price is due to concerns that the salary proposal could be rejected at the annual shareholders’ meeting scheduled for June 13.

Musk may step down as CEO if the salary proposal is rejected, which could plunge Tesla into chaos.

© News1

In addition, a report by JP Morgan states that it would take years for Tesla’s RoboTaxi (autonomous vehicle) to become profitable, contributing to the decline in Tesla’s stock price. As a result, Tesla’s stock has plummeted more than 31% since the beginning of 2024.

In response, many investors have been lowering their target prices for Tesla.

On June 12, Bernstein predicted in a report that “if Musk’s salary proposal is rejected at the Tesla shareholders’ meeting, the stock price could fall to the $120 range.”

Considering the current stock price at $170, this implies a further 30% drop.

In a letter to clients, Bernstein Stock Analyst Toni Sacconaghi predicted that “if the salary proposal is rejected, the anxiety that Musk could leave the company could put downward pressure on the stock price in the future.”

He also suggested that “even if Musk’s compensation plan passes the shareholders’ meeting, the effect on boosting the stock price will be minimal” and presented Tesla’s investment opinion as underperforming the market.

There are even predictions that it could fall into the $80 range. According to the Tesla target price status compiled by Yahoo Finance, the highest target price for Tesla is $310, while the lowest is $85, and the average is $182.

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