Sen. Elizabeth Warren, D-Mass., isn’t drinking Elon Musk’s Kool-Aid like some of her Republican colleagues in Congress.
And on Sunday, Warren sent a letter to the chair of Tesla’s board of directors sounding the alarm about a widely held belief that Musk is misusing Tesla by leveraging it to build up Twitter.
To investors’ dismay, Tesla’s stock price has plummeted at various times throughout Musk’s acquisition of the social media platform — a deal he has said he sold Tesla shares to make.
Musk’s obsession with Twitter and the precipitous stock downfall at Tesla are part of the reason some Tesla investors want him to step down as CEO. Warren’s letter to Tesla’s Robyn Denholm voiced some of those concerns.
“[E]very 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,” she wrote.
Warren’s letter cites this New York Times article claiming Musk saddled Twitter with $13 billion in debt in order to acquire the platform — including $1 billion in interest, which is more than the company’s cash flow for all of 2021. She also raised concerns about allegations that Tesla employees felt pressured to do work for Twitter in the early days of the acquisition, despite Musk’s claiming the employees had volunteered.
“This use of Tesla employees raises obvious questions about whether Mr. Musk is appropriating resources from a publicly traded firm, Tesla, to benefit his own private company, Twitter,” Warren wrote.
And she said Twitter’s business could ultimately hinder Tesla in other ways — by taking lucrative advertisement deals that boost Tesla’s competitors, for example, or by tarnishing Tesla’s brand through Musk’s open association with racist extremists on Twitter.
Warren used the Tesla board’s own words to highlight concerns about its complicity in Musk’s bumbling leadership of the automobile company.
“Your legal responsibility is — as Tesla’s own public commitments state — ‘to serve as a prudent fiduciary for shareholders and to oversee the management of [Tesla’s] business,’” she wrote, citing the board’s statement on corporate governance.
“The basic structure of Mr. Musk’s deal to buy Twitter, and his actions since becoming CEO, raise a number of concerns,” Warren wrote.
She added that she is seeking information about “how the Tesla Board is monitoring these conflicts of interest, what guidelines the Tesla Board has put in place to protect Tesla, and how the Board is enforcing those guidelines.” The letter lists a dozen questions Warren wants answered to help her “evaluate current laws and current law enforcement in this area."
Musk isn’t taking the letter well. He wrote on Twitter: “The United States has definitely been harmed by having her as a senator lol.”
It’s also worth noting that Musk hinted at abandoning his job as Twitter’s CEO the same day Warren’s letter was sent to Tesla’s board: On Sunday, he posted a Twitter poll asking whether he should step down as CEO of Twitter.