Tesla’s Shares Fall 7% Amid Executive Departures and Elon Musk’s Smokey Interview
Tesla’s shares took a hit Friday after two executives announced their exit from the company, while CEO Elon Musk smoked what appeared to be marijuana on a comedian’s podcast.
“It’s very difficult to keep a car company alive,” Musk told the interviewer, just one of many unconventional statements he made that likely spooked investors.
Tesla’s shares tumbled as much as 10% in mid-day trading Friday, Bloomberg reports—the largest one-day drop since June 2016. They later recovered somewhat to $262.14, a decline of $18.81, or 6.70%.
The drop comes the same day as the public announcement that chief accounting officer Dave Morton would resign. After just a month on the job, Morton said he’s had to “reconsider” his future.
“Since I joined Tesla on August 6, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” said Morton in company filings, CNBC reports. “As a result, this caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting.”
Morton joined the electric car company the day before Musk tweeted that he was considering taking the company private, causing stocks to soar and prompting and a Securities and Exchange Commission investigation from over whether he had funding secured, as he had stated. Musk has since reversed his plans.
CNBC reported that Morton felt he wasn’t being heard when he attempted to discuss the realities of going private. According to CNBC, Morton felt Musk and the other executives didn’t care to listen to the financial obstacles involved with taking Musk’s tweet seriously.
Aside from Morton, Tesla also lost its chief human resources officer on Friday. Gaby Toledano, who took a leave of absence mid-August, announced she would not return to the company, Bloomberg reports. Friday was also the last day for Sarah O’Brien, Tesla’s vice president of communications, who announced her resignation last month.
These three executive departures only add to the leadership turnover of the year, and Musk’s appearance on comedian Joe Rogan’s podcast late Thursday night didn’t ease shareholder’s minds. While sipping whisky and smoking what Rogan called a joint containing a mix of tobacco and marijuana (which is legal in California) throughout the two and a half hour podcast, Musk discussed Telsa, flame throwers, and artificial intelligence.
His erratic behavior isn’t new: Amid the rescue of a boy’s soccer team from a Thailand cave earlier this summer, Musk accused one of the divers of being a pedophile. The accusation seemed prompted by the man’s criticism of Musk’s contributions to the rescue. Musk later publicly apologized for those claims, but then later doubled down on them in an email to a Buzzfeed reporter.
With Musk’s questionable behavior persisting, an analysis from Consumer Edge states that Tesla “needs to entertain a major change in the C-Suite” in order to regain stability, MarketWatch reports.
“The ongoing, effectively self-inflicted public relations crisis is now affecting key personnel within the organization and detracting the market from the fundamentals (which have been improving dramatically through 2Q18),” read the analysis.