Tesla Inc. investor Ross Gerber backed down from his efforts to get a seat on the electric-vehicle company’s board after he got what he wanted.
On Friday, after the market closed, Gerber said in a tweet that he would withdraw his nomination to join the Tesla TSLA, +5.46% board of directors, stating that as a “friendly activist” he felt shareholders had been heard. In a conversation with MarketWatch later that day, the co-founder and CEO of Gerber Kawasaki Wealth and Investment Management said that Tesla representatives had promised him access and change, leading to his decision to avoid what could have been an unpleasant situation.
“There was no real reason for me to push into what could be a hostile situation,” Gerber said. “I manage people’s money for a living and I have my own company.”
Gerber Kawasaki is an investment advisory firm that also has its own ETF, AdvisorShares Gerber Kawasaki GK, +1.65%, which has Tesla as its top investment, and has attracted many clients with Tesla shares in its portfolios. Gerber has been a longtime bull on Tesla, so some bearish investors may have been pleasantly surprised by his announcing he would try to get a seat on Tesla’s board, in part because he was not happy with Tesla’s lack of a public relations team to deal with its many crises since Chief Executive Elon Musk bought Twitter Inc. and took it private.
After announcing the idea on Twitter in January and speaking to some reporters, including MarketWatch, in mid-February, Gerber disclosed his intentions in a letter to Tesla’s general counsel. But it may not have been too difficult for Tesla to dissuade Gerber from his plans after he was guaranteed some one-on-one meetings with Tesla executives, possibly including Musk, at Wednesday’s investor-day event.
“They said they will try to set that all up for me, there will be time to meet with different division heads and executives,” Gerber told MarketWatch. “There is no conflict between my ideas and what they want.”
Gerber said Tesla was receptive to his ideas, which focus on combatting negative perceptions of the company through advertising and PR, having responses during times of crises, and convincing Wall Street that the company is more than Musk.
“There is so much complication to being on the board, especially for me, because the whole goal was to try and get the company to respond, to spend money on advertising and have a really proactive PR team,” he said.
Beyond just changing the current narrative, he also sees legitimate problems that need attention, such as Tesla’s service department.
“They grew too quick, they don’t have the teams big enough to service the amount of cars out there, they are focused on improving that,” he said.
Gerber also said be believes Tesla will showcase more company executives at its investor day, as proof they are listening to investors’ concerns about the company’s lack of succession-planning, while Musk is currently believed to be spending much of his time at Twitter. One of Gerber’s Twitter followers, Stuart Zuckerman, questioned that notion, and tweeted out photos of past Tesla meetings, with plenty of other executives on the stage besides Musk.
Gerber also said he was nervous about potential litigation or the time in court some directors have spent lately, referring to two recent lawsuits, the most recent being the shareholder lawsuit in federal court over Musk’s 2018 “funding secured” tweet to take Tesla private, where several Tesla directors were called to the stand earlier this year. A jury found that Musk was not liable for the losses investors suffered.
“There is a responsibility you have on the board that is not really that fun. … That was one of the considerations, how much time do I want to spend talking to lawyers,” Gerber said.
Given how much time Musk has recently spent talking to lawyers and in courtrooms, not attempting to join Tesla’s board may have been one of Gerber’s wisest moves yet. But Tesla and Musk don’t always follow through on their promises — remember Autonomy Day? — and Musk has long eschewed advertising and PR with a passion. But ever hopeful, Gerber tweeted there will be “more to come” and said he is looking forward to seeing what Tesla is going to show investors.