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Tesla erupts in chaos after senior execs leave, Musk tokes up

Chief accounting officer leaves after less than a month.

The turmoil at Tesla has reached a fever pitch, with the news that two senior executives are leaving Elon Musk’s electric-car maker emerging hours after he smoked marijuana during a podcast interview streamed live online.

Chief accounting officer Dave Morton gave notice Tuesday that he was resigning less than a month into the job, according to a Friday filing. Tesla’s stock plunged, then extended declines after Gabrielle Toledano, the head of human resources who’s been on a leave of absence, told Bloomberg News that she won’t rejoin the company.

Morton, a former chief financial officer for computer-drive maker Seagate Technology, joined Tesla one day before Musk tweeted that he was considering buying out some investors at $420 a share and taking the company private. The CEO abandoned that effort 17 days later, and all the while drew a subpoena from the Securities and Exchange Commission and a series of lawsuits alleging market manipulation.

“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 the filing. “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.”

Tesla shares fell 6.3% to $263.24, the lowest close in five months. The company’s 5.3% bonds declined as much as 4 cents to 81.75 cents on the dollar, a new low, according to Trace bond price data.

Tesla has long struggled with high turnover involving its senior executives, and its finance team in particular has gone through a period of significant tumult. In the first quarter of this year, the company lost Morton’s predecessor, Eric Branderiz, and Susan Repo, who was treasurer and vice president of finance. CFO Deepak Ahuja retired in 2015, only to return last year when his successor, Jason Wheeler, quit after just 15 months.

In leaving the accounting chief job, Morton walked away from a $10 million new-hire equity grant that would have vested over four years. Friday was also slated to be the last day for Sarah O’Brien, Tesla’s vice president of communications, whose departure was announced last month.

Up in smoke

Musk, 47, sipped whiskey during a more than 2 1/2-hour podcast interview with comedian Joe Rogan late Thursday that touched on topics from flame throwers and artificial intelligence to the end of the universe. While Musk said he was “not a regular smoker of weed,” he took a drag from what Rogan said was as a joint containing tobacco mixed with marijuana, which is legal in California.

“It’s quite hard to run companies. Especially car companies,” Musk said. “It’s very difficult to keep a car company alive.”

Philippe Houchois, an analyst at Jefferies Group with a hold rating on Tesla shares, said that Musk “seems to be on a slightly self-destructive bent.” In an interview with Bloomberg Television, he called for the company to split up the chairman and CEO jobs. Musk has served both roles since October 2008, and shareholders rejected a proposal calling for an independent chairman earlier this year.

“The team, the skill set that have been phenomenal to create Tesla are not the ones we need for the next stage,” said Houchois, who has a $360 price target on the stock. “There’s a skill set that needs to be added at the top that Mr Musk doesn’t have.”

Tesla’s board of directors is on the lookout for senior talent but is not actively searching for a chief operating officer, a person familiar with the board’s thinking told Bloomberg News in August.

Morton and Toledano’s departures — and Musk’s performance on the podcast — also alarmed James Albertine, who rates Tesla a hold with a $300 target.

“Evidence is becoming more clear that Tesla needs to entertain a major change in the C-suite,” Albertine wrote in a report. “The ongoing, effectively self-inflicted public relations crisis is now affecting key personnel within the organisation” and distracting the market from fundamentals that have been improving, he said.

© 2018 Bloomberg L.P

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Elon has lost his stature of admiration

Arrogance & conciet eventually does have a way of tripping one up

Tesla stock however in the last six hours has clearly shown that it really isn’t as bad as this article wants it to be… Why does everyone not like Elon Musk FFS…

It’s that people do not like Elon Musk per se, I assert. This reactions is people’s reaction to dealing with anyone trying to achieve greatness things. There was just as much noise around him back in 2008.
It will only take one quarterly positive result for the narrative to change.

You can get a million new high earning execs tomorrow, never a Elon Musk.

Musk seems to be having a breakdown of sports. I hope he gets the professional help he seems to need.

Sorry, should be of ‘sorts’ not ‘sports’.

Maybe a Freudian slip?

😉

Not the first joint-puller Pretoria Boys High has spat out. Who cares? He’s a bona fide genius, the crazy is always part of the deal. Love this guy. Him, Smuts and Mandela, our three greatest South Africans ever IMHO (so far)

Sounds like Morton is a “Girls Pants”! This is simply one of those moments in the company’s life where the bulls will wrestle with the bears. With such a large short position out there, if it is not covered soon and things stabilise which they usually do, they will be gored again! Personally I think Musk is a disrupter and should be admired and encouraged. However crazy his ideas are at times, the world needs guys like him! I hope he succeeds and gets to build a stronger company from all the current noise!

Hard to understand Elon’s thinking here. It appears he quite enjoys the spotlight, or courting controversy. One thinks he should maybe just rein it in for a while and focus on what’s really important. Perhaps someone should share the story of Icarus with him.

Another hysterical propaganda piece by Dana Goebbels

Agreed , besides this is such old news already. If you are going to report on a news worthy item , at least make sure its current……….

There is nothing more beautiful than a Tesla and nothing more sane than Musks vision – the man is entitled to be unnerved by extraordinary demands like production, staff shareholder and customer expectations. It’s a very hard balancing act when you’re in it alone. What will be will be, but it will be a sad day if we lose the Tesla, the man and the vision.

You have to give it to the billionaire risking it all on things that can keep big part of mankind busy with productive stuff..

not like most other dead weight money hoarders that just strive to sit back and pull in the rent every month.

However an investor with good ideas is nothing really, that can happen in academia. You need the right skill to make it happen…

BMW and Merc have have all those delivery skills and might over take him..

Musk is the da Vinci of the 21st century, in earlier days the he would be on the stake in the town squire, we mortals do not understand the vision of this man, he is centuries ahead in his thinking then the rest of us, just as da Vinci was.

Some employee churn and a half-hearted drag on a (legal) joint in the spirit of the podcast Musk was a guest in is hardly turmoil.

Sensationalist nonsense.

I’m just sitting here laughing as Tesla stock sits at 285,50 not 6 hours after this article was written…

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