ALBANY, N.Y. (NEXSTAR) — New York state senators want the state pension fund to cut ties with Tesla, citing the company’s financial instability and leadership issues. More than 20 senators, led by Patricia Fahy of Albany, sent a letter on Tuesday to State Comptroller Thomas DiNapoli, urging the sale of the fund’s Tesla shares.
In the letter, which you can read at the bottom of this story, 23 Democratic senators argued that Tesla’s presence in the portfolio threatens the New York State Retirement Fund. The fund ranks among the biggest public pension accounts in the country, serving over a million local workers, retirees, and beneficiaries. DiNapoli manages the fund and has sole authority over pension investments.
Although Tesla remains among the biggest stocks in the S&P 500, the letter to the comptroller warned that its volatility threatens investors, retirees, and the state. That’s why Fahy and the other senators told the comptroller to cut the state’s losses and divest.
“Comptroller DiNapoli appreciates Senator Fahy’s concerns and her highlighting of his ongoing efforts to improve Tesla’s corporate governance,” said a spokesperson from the Comptroller’s office when reached for comment. “As a long-term investor, the Fund remains committed to monitoring risk to our investments and engaging portfolio companies, including Tesla, to preserve and enhance the long-term value of our investments on behalf of our members.”
Under the leadership of controversial and erratic CEO Elon Musk, the letter contended, Tesla has been called out for anti-union practices, lack of corporate transparency, and allegations of workplace discrimination or misconduct. Plus, from a purely financial perspective, Tesla has struggled in key markets.
Sales tanked in the U.S., with recent accounting that showed 2024 as the company’s first year of annual decline since 2011. Tesla stock fell more than 28% in February, marking their worst month since 2022. Their profits also fell by 71%—from almost $7.93 billion to $2.31 billion—between the last quarter of 2023 and the last quarter of 2024.
According to Fahy’s accounting, Tesla holds the seventh largest share of the pension fund. Tesla stock trades at $290.80 per share, which could drop to a predicted $135 per share. Such a decline would ding asset owners by 1.2% of their total S&P 500 indexed stock portfolio.
Check out the letter below: