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- Tesla needs to make sure it’s meeting responsibilities to shareholders, Elizabeth Warren said in a letter.
- Those responsibilities include making sure Elon Musk’s Twitter takeover isn’t a conflict of interest.
- Tesla investors have urged Musk to step away from Twitter and focus on his publicly-traded EV maker.
Tesla’s board needs to make sure that the electric vehicle maker is meeting its fiduciary responsibilities to shareholders – and that includes making sure Elon Musk’s Twitter isn’t breaking the law, according to US Senator Elizabeth Warren.
“One key element of those duties is that every Board of Directors of a company with multiple shareholders – especially publicly traded companies – is responsible for ensuring that a controlling shareholder (especially one who is also a Chief Executive Officer or CEO) does not treat the company as a private plaything,” Warren said in a letter addressed to Tesla Chairman Robyn Denholm on Sunday.
Musk’s takeover of Twitter has been mired in controversy and has hurt Tesla’s brand, with many analysts pinning at least some of Tesla stock’s 60% decline this year on Musk’s outsized focus on the social media company. Specifically, Musk has faced growing criticism for his bizarre antics and political tweets, such as when he tweeted a meme of a Nazi soldier and mocked the use of gender pronouns.
“For example, under Mr. Musk’s leadership, Twitter has welcomed hate speech and sharply increased use of racist language, while advancing a broader platform for Nazis, virulent sexism, and climate misinformation,” Warren said, noting it could be a potential conflict of interest. “That association between Tesla’s CEO and the actions of Twitter could have an impact on the Tesla brand and its ability to market its vehicles to its target audience.”
Musk has also directed of Tesla resources toward Twitter that could be considered inappropriate, Warren added, considering that Twitter is now privately owned by Musk. She pointed to Musk’s request to his top Tesla and SpaceX employees to work at Twitter shortly after slashing around 70% of Twitter’s existing workforce. Investors were also alarmed by Musk dumping over $40 billion of Tesla stock this year largely to fund his Twitter revamp, leading to criticism that he’s using Tesla as an “ATM machine” to finance his pet project.
In her letter, Warren attached a list of inquiries for Tesla’s chairman, including questions regarding any formal agreement between Tesla and Twitter, and if Tesla’s board had reviewed Musk’s actions since his takeover.
Tesla investors have urged Musk to step away from the social media company, and users voted that Musk should step down as Twitter CEO in a self-conducted poll on the site. Musk vowed to abide by the results, but later tweeted that there was no one who wanted the leadership position that could keep the company alive, leading Tesla stock to fall another 2% on Tuesday.