Tesla tumbles on new executive departures, Musk interview

NEW YORK - Agence France-Presse

Shares of Tesla Motors tumbled Friday as investors were rattled by the departures of two executives and a late-night interview in which chief executive Elon Musk was seen smoking marijuana.

Tesla shares sank 6.3 to close at $263.24 after the latest events that heightened concerns over Musk’s erratic management style at the electric carmaker.

"Elon’s actions are making it harder and harder to support Tesla as a company," said analyst Gene Munster of Loup Ventures.

"His actions directly affect Tesla’s share price because Elon is Tesla."
Munster said that while there may be more "upside" to Tesla, Musk’s actions are hurting.

"The use of recreational drugs, legal or not, goes against the unspoken rules of being a public CEO," the analyst said in a blog post.

Shares came under pressure at the opening following the Musk online interview and news that chief accounting officer Dave Morton was leaving only a month on the job, citing the company’s frenetic pace.

Separately, human resources chief Gabrielle Toledano told Bloomberg she planned to exit the company, rather than return from a leave of absence.

Morton’s departure further roiled the company, which has been under heightened scrutiny since Musk’s chaotic Twitter announcement on August 7 that he was considering taking Tesla private, before reversing the plan two weeks later.

The ill-fated effort has prompted a US securities investigation and a class-action lawsuit alleging Musk was trying to punish investors who bet against the company.

Morton’s brief tenure with the company coincided with the aborted go-private push.

"Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations," Morton said in a securities filing.

"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."

Musk turned heads with a more than two-hour podcast interview with comedian Joe Rogan in which he drank whiskey and appeared to smoke a marijuana-and-tobacco cigarette proffered by the comedian as he mused about artificial intelligence and colonizing space.

At one point, Musk described the constant barrage of ideas in his mind as a "never-ending explosion," and said he wondered as a young boy whether he might be insane because it didn’t seem to happen to other people.

The appearance was the latest unorthodox move by Musk, who has often surprised investors with brash and unpredictable behavior as Tesla has sought to live up to lofty manufacturing targets for its Model 3 electric car.

Long a polarizing figure because of his swashbuckling style, Musk is seen by his champions as an entrepreneurial genius with the potential to remake the transportation system, while his detractors see him as an egotistical blowhard whose outsized promises have driven unjustified gains in the company’s values.

Especially bizarre moments involving the Tesla chief of late include disparaging remarks about Vernon Unsworth, a Briton who helped save boys trapped in a Thai cave and the abrupt shutdown of Wall Street analyst’s questions during a contentious earnings conference call.

"At times, Musk appears to be working against himself," analyst Munster wrote.

"At the core, we believe he wants to prove his doubters wrong, but many of his actions strengthen the case against him.

"If he wanted to prove them wrong with actions, he would delete Twitter, drop the Unsworth conversation and not use recreational drugs in a public setting."

In August, Musk told The New York Times he was exhausted from too much work and difficulty sleeping in an interview that sharpened questions about his mental stability.

Some observers have said Tesla could be helped with a strong number-two executive, but Friday’s departures create additional gaps in Tesla’s ranks.