Worried about Elon Musk?

Tesla CEO recorded smoking marijuana during podcast

Download Perspecs

Elon Musk's erratic behaviour is causing problems at Tesla

By Daniel J. McLaughlin

It has been rather difficult - and strange - year for Elon Musk. In 2018, he strangely accused a British cave diver who helped rescue a Thai football team and their coach of being a "paedo". He admitted to working a gruelling 120-hour work, spending just six hours sleeping. He has experienced business difficulties including problems with electric car production goals and his dubious claim that he had "funding secured" to take his company private.

And now, he has been recorded smoking marijuana on a popular webcast. It has been a testing time for the Tesla CEO, and it has been a testing time for his company.

"Once the subject of the most fawning media coverage this sides of the Korean Central News Agency's reporting of Kim Jong Un," the Washington Post writes, "the founder and chief executive of Tesla finds himself approaching laughingstock status." And the damage on his image has largely been self-inflicted.

Since January 1, Tesla's stock has plunged by around 19 per cent. As he was getting high on weed and whiskey during a recording of Joe Rogan’s podcast, his company's stock was getting lower. It plunged by nine per cent after the bizarre incident. Last month, the Tesla CEO tweeted: "Am considering taking Tesla private at $420. Funding secured." Following that announcement, it appears that he didn't have the funding secured after all - and since then, the shares have lost almost a third of their value, and falling to their lowest level since April.

According to the New York Times, Tesla has lost a distinction the company first achieved last year - the American automaker with the highest market value. It has been ceded back to General Motors.

The company has also been plighted by departures from two of its top executives. Dave Morton, its chief accounting officer, suddenly resigned last week, after only a month in the job. He cited concerns about "the level of public attention placed on the company" in his filing. Tesla's HR boss Gabrielle Toledano also left her role on Friday, following a leave of absence last month.

CNN argues that Musk is hurting Tesla with his bizarre behaviour, and investors are "looking at an easy punchline for comedians, a man who's became a walking Page Six item". Instead of focusing on Tesla's growing sales and ambitious plans, as well as predictions that the company will report a profit in the fourth quarter and a full year of profitability in 2019, they are watching Musk smoke a blunt with Joe Rogan. They suggest hiring a chief operating officer to lighten the load, as Gwynne Shotwell does at his other company, SpaceX.

Elon Musk is the face of Tesla, but the CEO is becoming problematic with his strange behaviour. The face of the company is an unpredictable and erratic man, and if it continues, the stock could plunge further as he scares investors off.

Download Perspecs
Business Insider

'He doesn't seem to want to build any confidence': Wall Street is asking questions of Elon Musk (TSLA) | Markets Insider

  • Wall Street is quickly losing confidence in Tesla CEO Elon Musk.

  • Tesla issued $920 million of convertible bonds that give holders the option to convert those instruments for Tesla stock at $360 a share on March 1, 2019. If the stock is trading below that level, Tesla may have to repay that $920 million.

  • Musk's "funding secured" tweet got Tesla's stock above the critical threshold, but the subsequent fallout has sent the stock even lower than before the announcement - now to $260.

  • Elon Musk was recorded smoking marijuana while being interviewed on the "Joe Rogan Experience" podcast on Thursday. And on Friday, it was announced Tesla's chief accountant had quit after one month on the job.

  • Analysts and investors are looking to the billionaire to get Tesla back on track for growth. Follow Tesla's stock price in real-time here.

Elon Musk sent shockwaves through the financial world in August when he attempted to take Tesla private at $420 per share.

Now, with the effort to take Tesla private having passed, the focus is shifting back to the company's fundamentals and Musk's performance as CEO, the Model 3, and a $360 stock price trigger on $920 million in convertible bonds.

Read Full Article
Download Perspecs