Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, has shifted from being a staunch supporter of Elon Musk to a vocal critic. Gerber, an early investor in Tesla Inc. (NASDAQ:TSLA), has significantly reduced his fund's stake in the company since November.

What Happened: Gerber cited Musk's erratic behavior on social media, the controversial revamp of Twitter, now known as X, and political controversies as reasons for his change of heart. He receives daily calls from clients asking to sell Tesla stock, expressing their desire to distance themselves from Musk, Business Insider reported on Sunday.

Despite the reduction, Gerber still holds $60 million in Tesla shares, hoping for a turnaround. However, he has set a six-month deadline for Tesla to improve its performance before potentially exiting the stock entirely.

Gerber's initial enthusiasm for Tesla began in 2013 when he tested a Model S. However, concerns about Musk's behavior have grown over time, especially after Musk's $44 billion Twitter purchase in 2021.

Gerber's criticisms include Musk's chaotic presence on social media and legal battles, which he believes have damaged Tesla's brand. He also attempted to address these issues by running for a seat on Tesla's board in 2023, but his suggestions were largely ignored.

"I see the stock as really overvalued right now because I don't think they make any of their numbers," said Gerber.

With Tesla's stock down 15% in 2024, Gerber remains skeptical about its future performance, suggesting the stock could drop another 15%. He believes other EV firms like Rivian Automotive Inc (NASDAQ:RIVN) could be the "next Tesla" if they can scale production and lower prices.

Why It Matters: Gerber's shift from a Tesla bull to a critic is significant, considering his long-standing support for the company. In August, he sold approximately $60 million worth of Tesla shares, citing declining confidence and lack of interest in the company's products. He still holds a $50 million stake but doubts Tesla's ability to meet its sales goals.

Additionally, Tesla's recent moves, such as considering Warner Bros. Studio for its robotaxi unveiling, indicate the company's focus on new ventures. However, critics argue that these initiatives are "smoke and mirrors," with Tesla's core business facing challenges like declining margins and slower car sales growth.

Moreover, the removal of Musk's "Secret Master Plan" from Tesla's website amid his increasing political controversies and evolving views on climate change has raised questions about the company's future direction.

Price Action: Tesla's stock closed at $214.11 on Friday up 3.80% for the day. In after-hours trading, the stock slightly declined by 0.21%. Year to date, Tesla's stock has decreased by 13.81%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote