By now, almost everyone has heard the latest in a series of weird behaviors from Tesla’s CEO, Elon Musk. Earlier this week, he went on a video podcast to discuss technology and ended up taking a “hit” i.e. smoked a joint violating very publicly the rules that he himself has written for all of Tesla’s employees against use of drugs.
While Musk was reaching new “highs”, departures of senior execs continued with Chief Accounting Officer resigning within a month of joining and head of human resources not choosing to come back from an extended vacation. Since the start of the year, 41 executives have left and Musk is joking around with a joint in his mouth.
Tesla shareholders are not finding his behavior funny anymore. Tesla stock is down over 30% since he tweeted the company was going private at $420 and quickly reversed his position a week later. The bankers – Goldman Sachs among others, who were salivating on the prospect of being involved in taking a $70 billion company private and cleaning up with millions of dollars in advisory fees, took a hit of a different kind.
Future Wealth’s View
Elon Musk’s behavior in the last two weeks has finally brought out the reality of his incompetence and has prompted funds run by BlackRock Inc to vote in favor of a recent shareholder proposal that would require Tesla to replace Elon Musk with an independent chairman. We think this does not go far enough. In our article over a year ago (link to the article is here (https://futurewealthllc.com/
If Musk would just stay off the weed and look at what is happening around him, he would find that German competitors Mercedes-Benz and Audi, are both showing off production-ready electric sport-utility vehicles aimed at Tesla’s Model X. And, Jaguar Land Rover is offering the I-Pace electric SUV while Porsche is taking on Tesla’s Model S high performance luxury car with the Taycan, expected to reach the market in late 2019.
Rarely has a good car company been derailed this badly by its CEO and Tesla’s board has the unenviable task of finding a Chairman and likely a COO to put the company back on the path of successful growth. But, finding accomplished automobile executives to take on these roles and manage Elon Musk’s meltdown is like searching for someone to be Chief of Staff for Donald Trump. Who would want this role? In the meantime, before someone from Tesla pens an anonymous article on NY Times revealing more details about Elon Musk’s sordid behavior, investors would be well advised to step away from Tesla stock and avoid taking the inevitable hit.