Shares of Tesla were flat in early trading Thursday after the electric vehicle maker denied a Wall Street Journal report claiming its board was actively searching for a successor to CEO Elon Musk.
The stock had initially dropped as much as 3% in overnight trading following the story, before recovering most of those losses.
Despite the modest rebound, Tesla shares remain under significant pressure.
Year to date, the stock has lost more than 25% of its value, extending a period of pronounced volatility.
Tesla’s shares surged from around $250 ahead of the US election to a post-election high of $480, fueled by investor optimism over a second Trump term and Musk’s perceived influence in the new administration.
That rally quickly reversed. Disappointing first-quarter delivery figures and increasing scrutiny over Musk’s political involvement triggered a sharp selloff, sending the stock down to just above $220 by April 8.
Together with operational headwinds, these factors have weighed on investor sentiment and added pressure to Tesla’s valuation.
Is Tesla replacing Elon Musk?
Tesla has denied a report by The Wall Street Journal claiming that its board is searching for a successor to CEO Elon Musk.
The report, citing unnamed sources, said board members had contacted executive search firms to begin a formal process to identify a new chief executive.
In response, Tesla chair Robyn Denholm dismissed the claims as “absolutely false” in a post on X.
Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company. This is absolutely false (and this was communicated to the media before the report was published). The CEO of Tesla is
“Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company,” she wrote.
The denial comes amid a period of weaker performance for the electric vehicle maker. Tesla recently reported lower-than-expected sales and profits for the first quarter.
Musk has acknowledged that his role in the Trump administration may be weighing on the company’s stock.
On last week’s earnings call, Musk said he expects to dedicate only “a day or two per week” starting in May to his new government position, the Department of Government Efficiency.
Tesla’s key man risk
While Tesla has denied the Wall Street Journal report, the story highlights how “perhaps no other company has as large a key man risk,” UBS analysts led by Joseph Spak told clients in a note Wednesday.
Tesla is at a critical juncture right now, Spak wrote.
The core business is still focused on cars, but “the bull case narrative is that Tesla is an AI company, with Musk himself indicating in various ways that the value of Tesla is tied to autonomous vehicles and humanoid robots,” Spak said.
Whether another executive can fill Musk’s shoes is uncertain.
“Finding a CEO who can captivate the market and investors as much as Musk is a tall task,” Spak said.
UBS rates Tesla a sell with a $190 price target, 33% below where the stock closed Wednesday.
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