Two top Tesla executives just jumped ship, the company’s share price is down 9 percent, and the CEO is busying himself smoking weed, doing podcasts and tossing accusations of pedophilia around. You could say things aren’t going so great for Tesla and Elon Musk these past few weeks.
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Headed for the exits: Tesla’s top accountant, Dave Morton, is out the door after being hired on July 30. Morton said the reason he’s leaving is because "the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” but that he still believed in the firm. Despite the public profession of confidence, CNBC reports that Morton decided to quit after just two weeks because he “wasn't being heard or understood.” Morton reportedly found Musk uninterested in grappling with the challenges behind taking Tesla private after a surprise announcement of the idea on Twitter.
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Another Tesla exec, human resources chief Gabrielle Toledano, told Bloomberg she wouldn’t be coming back after a brief leave of absence.
Investor anxiety: Outside of Tesla, others are starting to doubt Musk’s leadership. BlackRock Inc., which owns 4 percent of Tesla shares, voted in favor of a shareholder proposal to strip Musk of his role as company chairman. Other shareholders handily defeated the motion in a vote earlier this summer. But the move by a prominent outside investor highlights a growing unease among big money shareholders about Musk’s fitness.
It’s not just business, it’s personal: Tesla’s bad news isn’t all about the product. Musk’s bizarre, self-destructive behavior over the past few weeks—he described the past year as “excruciating” in one interview—have combined with news about SEC probes into company statements about its Model S car and stories of production hiccups to create a storm of doubt over the company’s future and leadership.
Lawsuits: Tesla has tacked up a host of shareholder lawsuits over the past few weeks thanks to to Musk’s verbal diarrhea. Trader Kalman Isaacs filed a suit against Musk for tweets in which he claimed to have lined up the funding in order to take Tesla private. In the suit, Isaacs claims Musk fabricated the financing to artificially inflate Tesla’s share price as part of an an elaborate, petty scheme to punish short sellers who are skeptical of the company. A handful of other shareholders have since piled on with identical suits.
Accidents: Tesla’s autopilot problems also aren’t going away. After a series of accidents and a class action lawsuit, Tesla reached a settlement with owners who had complained that the autopilot system in Model S and Model X cars was dangerous. But accidents involving the system keep happening and owners keep faulting the software. In the most recent incident, a woman in Utah is suing Tesla after she claims the autopilot system made her Model S plow into a firetruck.
Headbanger’s ball: Vignettes of Musk’s erratic behavior abound. The Wall Street Journal described an incident in which Musk, furious at the slow pace of production at Tesla’s California production line,banged his head against a car while yelling, “I don’t see how this could hurt me” and raging against a production line safety feature. An employee who informed Musk about the purpose of the feature was subsequently fired for what Tesla claimed were unrelated reasons.
Do you like drugs?: Elon took time out his busy schedule late Thursday to smoke a joint during an appearance on the Joe Rogan podcast. As many have pointed out, it’s not too surprising that a zillionaire Californian who’s really into space and like to play with flamethrowers also enjoys weed in a state where it’s legal. What is surprising is that he’s publicly blazing up at a time when shareholders and the broader public are questioning whether he is cracking up under the pressure. The message is that either don’t care about PR crisis driving your share price down or you’re not aware of it. Even venture capital firm Loup Ventures, which still professes optimism that there’s “more upside to shares,” wrote in a note that “Elon’s actions are making it harder and harder to support Tesla as a company,” and that the “use of recreational drugs, legal or not, goes against the unspoken rules of being a public CEO.”
Disgusting smear: When cave divers rescued a group of boys trapped in a flooded cave in Thailand, Musk tried to plaster his face over the incident by donating a mini-submarine for the rescue. Vern Unsworth, one of the international team of divers who rescued the boys without Tesla’s help, called the sub a PR stunt. Like an angry child, Musk then lashed out and, with absolutely no evidence,accused Troyer of being a pedophile on Twitter.
He later apologized for the slur and admitted there was no truth to it. But since his walkback, he has had both second and third thoughts about the smear. In late August, he tweeted about Unsworth: “You don’t think it’s strange he hasn’t sued me? He was offered free legal services.” That wasn’t true, as Unsworth’s showed with a letter that made clear his client was in the process of filing a suit. In an email to Buzzfeed this week, Musk was back at Unsworth again.
Not quite Uber: Tesla has tried to dip its toe into the booming ride-sharing business pioneered by the likes of Uber and Lyft, but at least one investor doesn’t think the effort is worth too much. Morgan Stanley estimated that Tesla Mobility is only worth about $17 billion or one tenth the value of competitor Waymo.
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