After a news report claimed that Tesla Inc. (NASDAQ:TSLA) was looking to replace CEO Elon Musk, a longtime Tesla bull dismissed the idea, calling the likelihood of such a move extremely low.
What Happened: On Thursday night, Gary Black, the managing partner at The Future Fund LLC, and a Tesla bull for years, addressed speculation about Musk’s potential ouster in a post on X, dismissing concerns regarding the board seeking his replacement.
In his post, Black said if Musk stepped down as CEO but stayed on as a Chief Technology Officer or a Chief Product Officer, Tesla’s stock could drop 5% to 10%. A complete departure, he warned, could trigger a 20% to 25% decline, wiping out nearly $220 billion in shareholder value.
Black’s post highlights the extent to which Musk still anchors Tesla’s $880 billion market cap, a key reason why he believes the “odds are low” that the board chooses someone to replace him.
The noted fund manager posted this on X, with screenshots of Benzinga’s report on Musk’s possible replacements based on prediction markets.
The post came just hours after Musk himself addressed the rumors, blasting The Wall Street Journal‘s report as an “extremely bad breach of ethics” and a “deliberately false article.”
Why It Matters: Another long-time Tesla bull, Dan Ives, of Wedbush Securities, said on Thursday that he believes Musk will remain as CEO of Tesla for at least the next five years, while also adding that this might have been the board’s warning shot.
Musk, a serial entrepreneur, is no stranger to friction in the workplace and unceremonious exits, with several such instances throughout his career.
Price Action: Tesla shares ended Thursday down by 0.58%, and are now down 1.06% after hours, in part due to the rumors and uncertainties surrounding a change in leadership.
The stock scores high on momentum and quality according to Benzinga Edge Stock Rankings, and is favorable in the short and long terms, but is unfavorable in the medium term. For more insights, sign up for Benzinga Edge.
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