Morgan Stanley's Adam Joans in new $TSLA note: "We recommend Tesla watchers keep June 13th highlighted on the calendar. We wanted to share some of our thoughts as we approach the event:
• An issue of control: Tesla is the only firm within Elon Musk's related companies (the "Muskonomy") where he does not have control or a blocking minority vote. While each of Elon Musk's companies are in some way or another 'AI adjacent,' he has expressed his concern and discomfort with moving Tesla further into the field of AI without having around 25% voting in the event this "powerful technology goes awry."
• A vote of strategic support? While an approval of the Tesla CEO's 2018 pay package would not, by itself, give Elon Musk a 25% voting block, we view the outcome as significant.
• Volatility. From our investor discussions, we find that while some are aware of the June 13th shareholder meeting/voting date, there is a surprisingly little amount of attention being paid to its significance to the performance of the stock.
• Tesla an AI company or auto company? In our opinion, Tesla’s AI potential will remain capped unless and until the voting control issue is resolved. This is extremely problematic for Tesla investors for a number of reasons, including the inability to quantify the impact. But we want to be clear to our readers that as long as the issue of blocking minority remains in limbo, we expect Tesla's share price to be dominated by the more sobering developments within the global EV industry.
• The capital game. The recent inflection in generative AI has contributed to a 'punctuated equilibrium' in capital formation, corporate strategies and investment decisions. It is becoming evident that the winners in the AI space may be the ones who can direct the greatest amount of capital at building the computational infrastructure (probes/inference, datacenter, energy resources, etc.) to train the neural nets.
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