An open letter was written by a shareholder of Tesla to Elon Musk, the chief executive of the company, in an attempt to quit a deal to take the firm private. She argues that the value of the car firm could skyrocket up to $4,000 (£3,121) per share within a period of five years.
The chief executive of ARK Invest, Catherine Wood, holds shares in Tesla. She said that taking the firm private today at the proposed $420 per share of Musk would “undervalue it greatly.”
The mathematics of ARK places future gross margins of Tesla at 80 percent, should it make the shift from a hardware manufacturer to a firm that is focused on mobility-as-a-service (MaaS).
This would span the expansion into self-driving taxi networks, electric vehicles, energy storage, and truck platoons as well as air taxis and other drones.
On a tweet that was posted on the 7th of August, the Tesla boss first suggested that he was considering taking the firm private at $420. It has since caused a series of controversies.
Currently, Tesla is facing multiple lawsuits and an investigation that was initiated by the markets watchdog of the United States, into whether the Tesla CEO orchestrated the ensuing fiasco in an attempt to hurt the short-sellers.
Wood continued: “I understand why you may want to take Tesla private, but I must try to dissuade you.”
Wood enumerated reasons including a loss in the free press as a CEO of a public company, the lack of speed in reacting to competitive market advantage, and denying individual investors the opportunity to play a role in the future of Tesla.
She continued: “Innovation [is] the most inefficiently priced part of the market. Tesla epitomizes this capital allocation problem and, when the market understands it, your stock should enjoy significant upside.”
The letter arrives as it was revealed that one of the largest shareholders of Tesla through various funds, Fidelity Investments, has sided with the management of the company on director votes and other controversial items in 2018.
Filings that were released today showed that Fidelity has a track record of voting as Tesla recommended in its shareholder meetings, despite the independent advisers including Institutional Shareholder Services recommending otherwise.
Some experts have predicted this will imply that Fidelity will continue to support the Tesla boss if the possible transaction is put to a vote.
According to Reuters, the filings last July that were made by Scotland’s Baillie Gifford, the largest owner of Tesla after Musk himself, also revealed that it was backing Tesla across the board at both meetings.
The share price of Tesla remained largely unaffected by the said news, dropping by only 0.35 percent.