Tesla Shareholders Demand AGM Date Amid Legal Deadline Concerns

Tesla's stock price has fallen as major shareholders demand a date for the annual shareholder meeting, with a group of 27 investors calling for transparency and governance reform. The company is close to missing a legal deadline and faces increased competition in the EV market. TipRanks has a Hold consensus for TSLA with a highest price target of $500.

Tesla (TSLA) has been facing significant headwinds as a group of 27 major shareholders, including U.S. state treasurers, pension funds, and governance experts, urged the company's board to set a date for this year's annual shareholder meeting. The shareholders cited legal obligations and growing governance concerns, as Tesla is close to missing a legal deadline and has not announced the meeting date [1].

The company's silence on the annual general meeting (AGM) has raised concerns, particularly in light of mounting scrutiny over CEO Elon Musk's political ambitions and the automaker's declining sales and stock price. Tesla shares have dropped 27% so far this year, reflecting investor confidence issues stemming from Musk's public feud with President Donald Trump and the expiration of EV tax credits [1].

Under Texas law, shareholders can move a court to require the company to hold its annual meeting if it has not done so within 13 months of the previous one. Tesla's last meeting was held in June 2024, and the company had initially indicated that it would file its annual proxy statement later than expected due to the board's delay in deciding on a meeting date [1].

Adding to the turmoil, Musk's push to launch a new political party, the America Party, has raised concerns about distractions from Tesla's core business. Musk's latest political move has led to a further decline in Tesla's stock price, slipping over 7% on Monday trading [2].

Investor sentiment has been negatively impacted by Musk's political activities and the loss of EV tax credits, which will expire on September 30. The loss of these credits, along with the potential impact on regulatory credit sales, has led to a downgrade of Tesla's stock by analysts at William Blair to Market Perform from Outperform. The analysts expect the impacts from the Build Back Better (BBB) bill to sour momentum and put pressure on Tesla's multiple premium [2].

Tesla's second quarter deliveries missed the mark despite the full availability of the EV tax credit, and the company is now on track for a second straight year of declining sales. The company's regulatory credit revenue, which accounted for 16% of its total gross profit in 2024, is expected to be significantly impacted by the changes in the BBB bill [2].

TipRanks currently has a Hold consensus for TSLA with a highest price target of $500, reflecting the market's cautious outlook on the company's performance [3].

References:
[1] https://finance.yahoo.com/news/tesla-investors-ask-board-set-173805862.html
[2] https://finance.yahoo.com/news/tesla-stock-drops-on-musks-battle-with-trump-over-new-political-america-party-loss-of-ev-tax-credits-140258537.html