Investors have $11 billion riding against Tesla as its annual meeting kicks off (TSLA)
- Tesla‘s annual meeting kicks off Tuesday afternoon in California.
- Short bets against the company have been at/near record levels for years, and don’t appear to be budging anytime soon.
- Three board seats, including the one held by CEO Elon Musk’s brother, have come under fire ahead of the meeting.
- Follow Tesla’s stock price in real-time here.
Tesla bears are frothing at the mouth ahead of the company’s annual meeting. Short interest — or a measure of bets against a stock — sits at $11.4 billion, up 29% from just two months ago, according to data compiled by S3 Partners.
The skepticism is nothing new for Elon Musk’s electric-car company, which has been the most popular short in the US equity market for much of the last two years. But it now comes at an extra contentious moment for Tesla as investors converge in California Tuesday afternoon.
Stockholders will be voting to re-elect three prominent members of Tesla’s board of directors at the meeting, all of which have come under fire from major investor groups. CtW Investment Group, which represents about $200 billion worth of pension holdings, says Elon Musk’s brother Kimball is unfit to serve on the board due to a lack of industry experience and lackluster results at Chipotle.
CtW also opposes the election of James Murdoch, son of British media mogul Rupert Murdoch, citing his ties to scandals in the country, and Antonio Gracias, who “lacks the independence to serve as Lead Independent director.”
Prominent proxy-advisory firm, Glass Lewis, has supported CtW’s motion and urged shareholders to vote against the board members. Because of the staggering of Tesla’s board terms, other members, including CEO Elon Musk who has also held the chairman seat since February 2017, are not up for re-election this year.
Stockholders will also be anxiously awaiting new information about Tesla’s ongoing struggle to meet its goal of producing 5,000 Model 3s per week. On Monday, internal documents seen by Business Insider revealed the company is blowing through a jaw-dropping amount of raw material and cash to make the new sedan.
For every 2,500 battery packs and driving units that leave the Gigafactory, the documents show, an additional 1,000 pieces of “nonconforming material” is created. Half of that will be reworked and put into other car parts. The other half becomes scrap.
Tesla has spent almost $150 million on scrap materials so far this year, according to the documents.
Shares of Tesla were trading down about 1.4% Tuesday morning. The annual meeting kicks off at 2:30 p.m. PT, after markets close.
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Read the full article from it’s original source: http://uk.businessinsider.com/tesla-stock-price-short-bets-not-budging-as-annual-meeting-kicks-off-2018-6