Elon Musk, Tesla Chair Slam Report Of New CEO Search As False — But Analyst Sees A ‘Warning Shot’

Hours after the Wall Street Journal reported, citing people familiar with the matter, that Tesla, Inc. (TSLA) had begun a search for a new CEO to replace Elon Musk, senior company leaders took to social media to issue firm denials. 

A Wall Street analyst, however, feels there might have been more to the whole episode.

The first response came from Tesla Chair Robyn Denholm, whose statement was shared by the company's official handle on X, which Musk owns.

Denholm said the Journal's report "erroneously" claimed that Tesla's board had contacted recruitment firms to start searching for a new CEO.

"This is absolutely false (and this was communicated to the media before the report was published)," she said. 

"The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead."

Next, Musk himself typed out a couple of reactions.

Slamming the move as an "extremely bad breach of ethics," Musk labeled the Journal's piece as a "deliberately false article" that failed to include the board's denial. 

"WSJ is a discredit to journalism," he said in a separate post.

Tesla shares fell in early overnight trading on Wednesday following the Journal's report, with retail chatter spiking on Stocktwits. They were still in the red during early premarket hours on Thursday.

In a note to clients, Wedbush Securities analyst Daniel Ives said Elon Musk made the right decision by reaffirming his focus on Tesla amid mounting tensions with the company’s board. 

Ives expects Musk to remain CEO for at least five more years and believes the board is no longer actively pursuing a search for his replacement.

“We continue to believe Musk’s days at the White House are now ending after this ‘warning shot’ from the Tesla Board,” Ives wrote, referring to the CEO’s recent political distractions.

On Tesla’s latest earnings call, Ives said Musk was “dialed in” and more measured, adding that the board may have influenced his opening remarks.

Ives said his firm believes the Journal’s report hinted at a “high-stakes poker game” between Musk and the board, but the situation has de-escalated, and Tesla is entering a new chapter focused on autonomous and robotics initiatives.

“This story will clearly create a ton of noise but we believe Musk is back in the driver’s seat at Tesla,” Ives concluded.

Wedbush maintained its ‘Outperform’ rating and $350 price target on the stock.

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