Tesla Refutes Claims of Seeking to Replace Elon Musk as CEO

Shares of Tesla remained stable during premarket trading on Thursday, following the company’s denial of a Wall Street Journal report that claimed its board was seeking a replacement for CEO Elon Musk. This report, which referred to sources familiar with the matter, suggested that the board had consulted multiple executive search firms to potentially initiate a formal CEO search.

Tesla’s stock initially fell by as much as 3% in overnight trading on the Robinhood platform but later reduced its losses. In response to the report, Tesla’s chair, Robyn Denholm, took to social media to assert that the claims were “absolutely false.” She clarified that the board had not reached out to recruitment firms and expressed confidence in Musk’s leadership moving forward.

The report comes at a time when Tesla has faced significant challenges, with sales and profits experiencing a sharp decline. In the first quarter, the company reported a revenue drop of 9% year-on-year, totaling $19.34 billion, which fell short of analysts’ projections of $21.11 billion.

Revenue within its automotive segment dropped 20% year-on-year, largely due to the need for updates to production lines and a decrease in average selling prices driven by sales incentives. Additionally, the company’s net income plummeted by 71% to $409 million, equating to 12 cents per share, compared to $1.39 billion, or 41 cents a share, from the previous year.

Since the beginning of the year, Tesla’s stock has seen a decline of over 30%, reflecting broader concerns about the company’s performance in a competitive EV market and the impact of Musk’s other engagements on investor confidence.