Amidst the financial tremors shaking Tesla's foundations, New York City Council member Justin Brannan has positioned himself in favor of severing the city's investment ties with the electric car giant. Brannan, who is also gunning for the city comptroller seat, is proposing that NYC pensions fully divest from their estimated $1.2 billion holdings in Tesla. This comes as the stock price sees a severe downturn, compounding a broader sense of discontent toward Elon Musk's operational choices and political affiliations.
According to Gothamist, Brannan cites Musk's “existential threat to the American economy”, referencing recent federal funding cuts instigated by Musk's influence, which stripped away millions meant for migrant housing support, and impending job slashes at the Social Security Administration that may leave retirees stranded. Brannan's intent to push for divestment is part of a combatting strategy, aligning NYC's financial decisions with its values, a tactic reminiscent of historic moves, such as the apartheid-era sanctions against South Africa.
In a parallel move, a coalition of Democratic New York state senators, led by Senator Patricia Fahy, has drawn a line in the fiscal sand in a letter addressed to State Comptroller Thomas Napoli, urging a divestment from Tesla to safeguard state pension funds from the "increasingly perilous and financially unsustainable risk" that Musk's leadership poses. As reported by Fortune, the senators highlighted the potential danger to pension fund investments, particularly after Tesla's stocks took a 15% nosedive on a single Monday, marking a continuing downward spiral for the automaker.
Notably, the state pension fund held about 3.5 million shares of Tesla as of the end of last year, amounting to roughly $810.7 million. The New York State Retirement Fund, having been an activist shareholder, has a history of pressing Tesla on matters of corporate governance.
