Tesla Inc. (TSLA) - Get Report shares edged higher Monday after Elon Musk hinted the company was close to producing a low-priced electric car, but raised further concerns over the group's governance as he insisted its new chairperson wouldn't be able to oversee his actions.
Speaking with CBS's 60 Minutes, founder and CEO Musk said it was "not realistic" to think new chairwoman Robyn Denholm, who replaced Musk in October as part of a multi-million settlement with the U.S. Securities and Exchange Commission, could hold him to account as group CEO. He also said his Twitter account, the catalyst for both the stock's recent volatility and the ultimate SEC settlement, was not being monitored by company executives.
"It's not realistic in the sense that I am the largest shareholder in the company," Musk said when asked if his role in the company he founded would be subject to oversight from Denholm. "I can just call for a shareholder vote and get anything done that I want."
Tesla shares were marked 1.04% higher in the opening minutes of trading Monday and changing hands at $361.67 each, a move that would take the stock's two-month gain past 44%.
Musk also noted that his Tweets are only reviewed by the company if there is a "probability of causing a movement in the stock," adding ""I want to be clear. I do not respect the SEC."
The comments suggest that key conditions of the group's SEC settlement, which was reached in October, are not being met, raising questions about corporate governance at the Palo Alto, Calif.-based carmaker just as it appeared to be putting the tumult of Musk's Twitter account behind it with improving production and profitability figures.
Jefferies analyst Philippe Houchois lifted his rating on Tesla to "Buy" from "Hold" last week and put a $450 price target on the Palo Alto, Calif.-based carmaker based on "a structurally lower capex profile and improved balance sheet risk."
Tesla shares were also supported by data showing that it sold 18,000 Model 3 units in the United States last month as buyers rushed to collect the sedan ahead of the expiration of government tax credits on electric vehicles at the start of next year.
The stock is also teetering around the $358.88 level at which an outstanding $920 million bond issue can be converted into group stock. Last week, Bloomberg reported that holders of Tesla's convertible bonds, which mature in March, will be paid with a 50-50 mix of cash and stock, suggesting the group's free-cash flow generation is improving and its profitability may follow.
Musk called the group's struggles to meet his own lofty production targets earlier this year "life or death", and told CBS that "those betting against the company were right by all conventional standards that we would fail."
"But they just did not count on this unconventional situation of creating an assembly line in a parking lot in a tent," he said.