Tesla stock sinks as Wall Street Journal reveals Elon Musk's close relationships with board members

Last week, a Delaware Chancery Court judge ruled that Elon Musk's unprecedented pay package was improperly approved due to the close relationships of board members with the CEO. The Wall Street Journal reported on Monday that Musk has extensively personal and financial ties with several Tesla board members, including:

  • Ira Ehrenpreis, who has invested tens of millions of dollars in Musk-controlled companies and is a close friend of Kimbal Musk, Elon's brother, and a fellow board member
  • Antonio Gracias, who has taken numerous vacations with Musk's family and has acquired "dynastic or generational wealth" from investing in Musk's companies
  • Todd Maron, who was previously Musk's divorce lawyer and advised the board and compensation committee

The Journal notes that Nasdaq exchange rules require independent directors to not have relationships that would interfere with their ability to exercise independent judgment. Tesla stock sank nearly 4% on the news, adding to its 30% decline so far this year.

This comes as Piper Sandler cut its Tesla stock price target, predicting deliveries this year will fall below 2 million and suggesting the company's growth would be flat. Critic Gordon Johnson, CEO of GLJ Research, told CNN that the Journal story "gives wealth managers a reason to exit," and that the "underlying growth and margin story for their business is imploding."

This new revelation sheds further light on the lack of real oversight of Musk and the potential conflicts of interest among Tesla's board members, fueling concerns on Wall Street about the company's future.