Shareholder pleads with Musk to keep Tesla public
A Tesla shareholder has written an open letter to chief executive Elon Musk in a bid to abandon a deal to take the company private, in which she argues the car firm's value could skyrocket up to $4,000 (£3,121) per share within five years.
Catherine Wood, chief executive of ARK Invest which holds shares in Tesla, said taking the company private today at Musk's proposed $420 per share would "undervalue it greatly".
ARK's mathematics puts Tesla's future gross margins at 80 per cent, should it make the switch from a hardware manufacturer to a company focused on mobility-as-a-service (MaaS).
This would span expansion into self-driving taxi networks, truck platoons, electric vehicles and energy storage, as well as air taxis and other drones.
Read more: Tesla short-sellers have the last laugh
Musk first suggested he was considering taking the company private at $420 in a tweet on 7 August, which has since caused a hurricane of controversy.
Tesla is currently facing numerous lawsuits and an investigation by the US markets watchdog, into whether the Tesla billionaire orchestrated the ensuing fiasco in a bid to hurt short-sellers.
"I understand why you may want to take Tesla private, but I must try to dissuade you," Wood continued.
She listed reasons such as a loss in free press as a public company's CEO, the lack of speed in responding to competitive market advantage, and depriving individual investors the chance to play a role in Tesla's future.
"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," she added.
The letter comes as it was revealed Fidelity Investments, one of Tesla's largest shareholders through various funds, has sided with the company's management on director votes and other controversial items this year.
Read more: Tesla shares rise as Musk takes back seat and Morgan Stanley halts coverage
Filings released today indicated Fidelity has a track record of voting as Tesla recommended in shareholder meetings, despite independent advisers such as Institutional Shareholder Services recommending otherwise.
Experts have predicted this will mean Fidelity will continue to support Musk if the potential transaction is put to a vote.
Filings in July by Scotland’s Baillie Gifford, Tesla’s largest owner after Musk himself, also showed it backing Tesla across the board at both meetings, according to Reuters.
Tesla's share price remained largely unaffected by the news, falling 0.35 per cent.