Tesla (NASDAQ: TSLA) CEO Elon Musk says he is thinking of quitting his role, while he has also sold $963.2m of company stock. The world’s wealthiest man tweeted that he is contemplating becoming a full-time influencer.
While this may be a joke from the enigmatic billionaire, it has still sent the company’s share price lower by around 1%. But could Musk step aside, and what would happen if he did?
https://twitter.com/elonmusk/status/1469153995428085762?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
Could Elon Musk step down?
Musk has previously discussed when he might step aside from his role at Tesla. In a company conference call in January, he said he expected to head the company for “a few more years” but added that it would “be nice to have a bit more free time on my hands”.
Even so, Musk heads other companies besides Tesla. He is also the CEO and Chief Engineer at SpaceX, and a key player for The Boring Company, Neuralink and OpenAI. It’s difficult to see him wanting to step aside from all of these roles.
Musk does frequently discuss how hard he works, stating on the same conference call that he works day and night seven days a week. While this is likely a bit of an exaggeration, there’s no doubt Musk probably has an extreme workload on his hands.
He has also taken to mixing with celebrities, evidenced by his friendship with eccentric rapper Kanye West and his relationship with Canadian singer Grimes. It’s not impossible that this celebrity lifestyle is more enticing than trying to head several major companies.
However, it seems wise to take Musk’s claims with a generous pinch of salt.
Is Elon Musk a liability?
While Musk’s leadership of companies like Tesla, SpaceX and PayPal (NASDAQ: PYPL) has seen him become the richest person on the planet, his tenure has not always been smooth sailing.
For example, Musk found himself testifying in front of a judge this summer amid a lawsuit brought by some Tesla shareholders over his part in the $2.6bn acquisition of SolarCity, a residential solar installer.
Musk has also run into trouble for his Twitter (NYSE: TWTR) posts before. In 2018 he found himself in hot water with the US Securities and Exchange Commission (SEC) after claiming on the platform that he had secured funding for a private takeover of Tesla.
On that occasion, the South African born businessman temporarily stepped down from his chairmanship of the EV manufacturer and reached a settlement with the SEC.
He’s also no stranger to a social media spat.
In November, he got into an online scrap with former US Presidential candidate Bernie Sanders over tax policy, abrasively telling the Senator “I keep forgetting you're still alive”.
While these moves are not exactly characteristic of a safe pair of hands, that doesn’t mean Tesla and Musk’s other ventures would benefit from his absence.
What might this mean for Tesla?
Despite the many controversies to his name, there is no doubt that Musk is a big draw for retail investors. He is one of the most well-known names on the planet and many investors love the drama he causes on social media, even if it does sometimes cause share price dips.
Elon Musk simply has a personality that appeals to investors, unlike other major CEOs like Amazon’s (NASDAQ: AMZN) Jeff Bezos and Meta’s (NASDAQ: FB) Mark Zuckerberg.
The drama he brings might seem problematic, but Tesla’s share price has climbed by 38.05% across the year to date and, helped by Musk never being far from the news, the company is just about the most well-known electric vehicle manufacturer in the world.
Musk has also, rightly or wrongly, come to represent the development of ambitious technology. Tesla is bringing electric cars to consumers, SpaceX is helping to power advances in space travel and his hyperloop and AI ventures sound straight out of a science fiction novel.
These are all exciting companies and ideas, but they are all linked intrinsically to Musk. If he leaves the stage, a lot of retail investors might follow him off.
Musk himself has previously offered his thoughts as to what would happen to Tesla if he left the company. In July 2021, speaking in court about Tesla’s acquisition of SolarCity, Musk said he had “tried hard not to be the CEO at Tesla, but I had to or it would die”.
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