Shares of Tesla Inc. (TSLA) have been on a roll over the past couple of weeks, reversing some major declines caused by investors' concerns regarding the electric vehicle maker's high profile CEO and founder Elon Musk. Now, Tesla's third-largest shareholder said it is willing to back Tesla with additional capital to help Musk meet his lofty long-term vision.
Tesla Recovers from Period of Harsh Musk Criticism
On Monday, Tesla shareholder Baillie Gifford, which owns a 7.72% stake in the Palo Alto, Calif.-based automaker, praised Musk as an entrepreneur of "vision and ambition, who's working towards a social good," as first reported by The Times of London.
The billionaire investor and engineer has been under fire recently as the Street criticizes his unorthodox behavior at the helm of Tesla, aerospace company SpaceX and infrastructure and tunnel construction company The Boring Co. His Twitter account has gotten him into particular trouble. Earlier this year, the CEO announced on social media that Tesla was weighing a take-private acquisition when shares hit $420, sparking allegations of stock manipulation and an investigation by the Securities and Exchange Commission (SEC) which led to a $20 million fine.
Meanwhile, the CEO's loyal followers believe he can continue to silence his haters and burn the short sellers, ultimately fulfilling his promise to completely disrupt and transform the global auto industry, posing a larger threat to traditional car makers as well as other transportation players like Uber and Lyft. Despite a history of delaying targets and falling short of estimates, Musk has a track record of success. Since its IPO in 2010 Tesla, a company that many doubted would ever produce an electric car, has seen its shares skyrocket nearly 1,900%.
While Musk has repeatedly stated that Tesla will not need to raise more funds to sustain its operations and meet its goal of profitability by the end of the year, news that one of its largest shareholders is willing to inject more capital into the company has boosted the stock, lifting sentiment regarding a "worst case scenario."
Trading up 0.1% at $335.33 on Tuesday morning, Tesla shares have gained 7.7% year-to-date (YTD) compared to the broader S&P 500's negative 0.2% return, and reflect a market capitalization of about $57.1 billion.