Ross Gerber takes credit for helping Elon Musk in the thick of it.
The Tesla investor was one of Musk’s earliest supporters, and among the few who poured big money into the car company before it became one of the most popular stocks on Wall Street and among retail investors.
That paid off through 2021, when Tesla shares reached an all-time high and made Gerber a “fortune,” he said in a previous interview with CNBC.
However, the honeymoon appears to be over — and Gerber says he’s now on the verge of turning his back on the pioneering electric carmaker.
The Gerber Kawasaki Wealth and Investment Management CEO — who frequently takes to the airwaves to deliver what these days is often scathing commentary about Tesla and Musk — says he now gets calls every day from his clients, who ask him to sell Tesla stock from their portfolios.
Many of them say they “want nothing to do with Elon,” he told Business Insider, largely due to the Tesla CEO’s erratic behavior on social media, his controversial revamp of Twitter, and his growing web of political controversies.
Since November 2023, Gerber has shed around half of his fund’s stake in Tesla. Just $60 million remains invested in the car company, out of waning hope it will make a comeback, and because of limitations on how much he can sell at once.
At this point, Gerber says there’s a six-month window for Tesla to get its act together before he sees his firm bailing on the stock completely.
“Absolutely,” Gerber said when asked if he would completely exit his investment fund’s position in Tesla. “If you’re not making any money and you’re not doing what needs to be done to make the company money or your company do well, I have to move on. It’s just, that’s the way.”
From top Musk supporter to vocal critic
Gerber’s attitude is a stark about-face compared to the mood over a decade ago, when Musk’s car company first opened a store in Santa Monica. Gerber popped in and tested a Model S — marking the beginning of his journey to becoming one of the company’s significant early backers.
“We went down and tried it out in 2013, I think it was, and was super impressed,” Gerber said of the car.
Even then, though, there were “warning signs,” particularly with regards to Musk, Gerber said. He said he was aware, for instance, that Musk partied and used drugs, which The Wall Street Journal shed light on in a report in February. He had also heard of drama surrounding Musk’s relationship with Grimes and his daughter, even before the media began reporting on it.
“I was like, what the hell is going on?” Gerber said of the rumors. “I’m just like dude, this guy is not — this isn’t a good thing.”
Gerber shrugged off the early warnings, thinking of Musk as an archetypal tortured genius, but red flags became harder to ignore after Musk announced his $44 billion Twitter purchase in 2021. It was the move that kickstarted what Gerber has described as three “horrendous” years for the company.
It’s not hard to see why. The Tesla CEO caught flak for his dramatic takeover of the social media site, which involved selling huge chunks of Tesla stock to fund the purchase.
The situation wasn’t helped by Musk’s chaotic presence on X, with the CEO regularly writing posts that Gerber said were working to “destroy” Tesla’s brand.
Then came Musk’s legal battles with a Delaware judge, the drama of asking shareholders to re-approve a $56 billion compensation package, and Musk’s suggestion that he could move AI projects outside of Tesla if he didn’t own at least 25% of the company.
For Gerber, it’s all been too much.
“I’m not trying to take away what I feel his accomplishments are, especially with space, Tesla manufacturing, and robotics. But I think that my personal feelings toward what he represents is horror,” he added.
Gerber attempted to bring attention to the company’s issues when he ran for a seat on Tesla’s board in 2023, but his suggestions, like ramping up Tesla’s advertising, were largely ignored, Gerber said.
Tesla stock is down 15% in 2024, and though some analysts say they see the makings of a comeback story after a dismal first quarter of sales, Gerber isn’t among them. The stock could slide another 15%, he suggested, noting that he thinks the fair value is about $180 per share. Shares were trading at $210 each Friday at midday.
“I see the stock as really overvalued right now because I don’t think they make any of their numbers,” Gerber said, adding that he believed demand for Teslas was weak, and that he’s been unable to offload his own two Teslas for a fair price. “I don’t see how they sell more cars with this current strategy.”
Meanwhile, he’s taken an interest in other firms in the EV space. Rivian is one such firm he believes could be the “next Tesla,” if it can scale production and lower prices in the coming years.
Tesla either needs to make a clearer commitment to advertising and boosting auto sales, or Musk needs to clean up his image before Gerber thinks he’ll turn bullish on the stock again.
“I mean, if he wanted to change his image and all that, I would be thrilled. But that isn’t a possibility. So I don’t consider it an option,” he said.
