Tesla’s Shares Continue to Stumble as Executives Quit
As if Tesla’s CEO Elon Musk’s admission in an explosive interview in NYT about him taking pills to sleep.
This, after he announced the departure of his recently appointed accounting chief. Musk’s erratic behavior and the sudden rise of executives quitting left the investors stunned and uncertain of the future of the giant electric carmaker company, Tesla.
The Impending Downfall
Tesla stocks and shares plummeted more than 6% on Friday at $263.24, leaving investors on edge after the explosive interview of Musk in August in which the CEO proposed the privatization of the company, only to find out the Saudi Arabian government hasn’t committed to funding Tesla’s privatization yet. Aside from that, many investors were wary of the CEO’s health condition after Musk confessed how he uses drugs to make himself sleep at night.
They couldn’t help but be suspicious whether or not Musk’s proposed privatization was just a product of his hallucination. Just a month after Tesla was plunged into a series of controversies, the Chief Accounting Officer Dave Morton filed his resignation last Friday due to his discomfort with the attention and scrutiny the company received from the public.
He also confessed he couldn’t keep up with the pace of work after joining the company for a month. Meanwhile, the Chief People Officer Gaby Toledano also confessed he wouldn’t return from his leave of absence after a year of joining the company.
Later on Friday, the company appointed a new president of automotive operations named Jerome Guillen to oversee the management, and he’ll be reporting to Musk directly. The said move gave Musk an expert on the auto industry to lean on at crucial times like this. Despite the company’s attempt to cope up, the shares barely moved even after the promotions were announced.
Musk’s Strange Behaviors
Morton and Toledano were just one of the few Tesla executives who quit from the company after the U.S. Securities and Exchange Commission conducted an investigation on Musk’s proposed privatization plan. And it seems the controversies around Tesla have yet to subside. Just last week, Musk was filmed drinking his whiskey while smoking and wielding a Samurai sword during his live webcast show with comedian Joe Rogan.
Musk then admitted that he almost never smoked, not to mention he didn’t smoke weed since he claimed it wasn’t good for his productivity. However, the investors left confused since his statements and recent acts seemed in contradiction.
The Numbing Effect on Investors
Ever since the controversy started, Tesla’s $1.8 billion junk bond plummeted to 4 cents on the dollar below 82 cents. Coupled with the required 21% of the insured value upfront cost, a Tesla investor should have at least $280,000 to insure $1 million of Tesla’s debt for a year. Since Tesla’s stocks hit its lowest level last April, most of the companies short sellers added more than 810,000 shares to their positions, bringing in a total of 32.6 million shares in the company according to S3 Partners.
One of Tesla’s prominent short-sellers, Andrew Left, sued Musk and his company for issuing false and misleading information related to Musk’ abandoned plan. The said plan harmed not only the short-sellers but also those investors hoping the Tesla stocks would rise.
Despite Tesla’s plummeting performance, the head of investor relations Martine Viecha reiterates the company expects to reverse the trend and make a profit in the second half of 2018. He also restates the company’s forecast to build around 50,000-55,000 Model 3 sedans for the current quarter, indicating that Tesla’s working capital will also improve as their production increases.
More in Business
Can You Save Money by Increasing Your Insurance Deductible?
Increasing your insurance deductible will save you some money on insurance premiums but, the money you save may not be substantial...March 1, 2019
Want to Save More Money While Living a Languish Life? Move into these Affordable Countries!
Most Americans tend to quit their corporate job in their home country, despite the big salaries they have. The reason? It’s...March 1, 2019
Remortgaging May Be The Best or Worst Decision You’ll Make
With the continuous rise and fall of the mortgage rates in the market today, more and more people are taking the...March 1, 2019
Things You Didn’t Know Your Car Insurance Could Cover
When you hear about surprising things that can come from car insurance, it’s usually something like rate increases and mishandled claims....March 1, 2019
Financial Setbacks Rock Social Media Giants Twitter, Facebook and Snap Last Week, but Can They Make a Turnaround?
Stocks in the social media fraternity received a major pounding last week after executives from social media giants like Twitter and...March 1, 2019
With the Rise of Robo-Advisors, What is the Financial Advisory Industry’s Future?
In this modern world where technologies continue to evolve, new state-of-the-art robot-advisors like Betterment and WealthManagement have emerged that threatened to...March 1, 2019
Struggling to Find Your Ideal Career Path? These Tips Will Help You Sort It Out
One of the most common trends we see with millennials today is that they all seemed to be quitting their jobs...March 1, 2019
Fans Wait with Bated Breath as Apple Unveils 3 New iPhones
iPhone enthusiasts are now abuzz on social media after being brought to life with last week’s grand announcement that the company...March 1, 2019
How to Get The Best Price On Auto Insurance After Making Online Comparisons?
It is a fact that using online methods can get you good auto insurance prices. When you begin your search online...March 1, 2019