Published on September 7th, 2018 | by Steve Hanley0
Tesla Stock Plunges After Senior Executives Announce Departure
September 7th, 2018 by Steve Hanley
Dave Morton, formerly the chief financial officer for Seagate Technology, joined Tesla as its chief accounting officer a month ago. As part of his employment agreement, he was promised a $10 million equity grant if he remained with the company for 4 years. Yesterday, he quit, leaving the $10 million behind. It’s also been noted that he was at Seagate when the company went private, and it was considered that he was brought in to help Tesla go private.
Morton was gracious as he headed for the door. Bloomberg reports he made the following statement, according to a company filing. “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. 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.”
In pre-market trading, Tesla stock plunged more than 5%. Then the other shoe dropped. Gaby Toledano, Tesla’s head of human resources since May 2017, announced she too was leaving the company. She has been on a leave of absence for the past few weeks and will not return. That double whammy — combined with Elon Musk’s decision to spark up a joint with Joe Rogan during a podcast on Thursday (for a puff or two before indicating that he rarely smokes, doesn’t find that it does anything for him, and doesn’t like that it lowers productivity) — sent shares even lower.
At 9:46 AM, Tesla shares were trading at $252.25 a share — down almost 10% and the largest price drop since 2016. The company’s 5.3% bonds also lost 4 cents going down to 81.75 cents on the dollar, a record low and their biggest-ever decline according to Trace bond price data.
It’s no wonder Morton felt overwhelmed. His arrival at Tesla was followed the very next day by Elon’s bombshell tweet about taking the company private. Since then, the news reports for Tesla have been filled with stories about investors suing Musk for stock manipulation, an SEC investigation, and Musk’s ongoing jeremiad involving Vernon Unsworth, a Brit who became involved in the rescue operation of a youth soccer team trapped in a cave in Thailand.
Has Musk Gone Over The Edge?
Now let me perfectly clear. I have a different perspective on Elon than some of my colleagues at CleanTechnica. Where they may see a heroic figure who is singlehandedly struggling to help the world break its addiction to fossil fuels (and they are not wrong for thinking that), I see a man who — although an acknowledged genius — is on the verge of mental collapse.
In a report by BuzzFeed, Musk responded to a request for comment on the Unsworth controversy with the following email: “I suggest that you call people you know in Thailand, find out what’s actually going on and stop defending child rapists, you f**king a**hole. He’s an old, single white guy from England who’s been traveling to or living in Thailand for 30 to 40 years, mostly Pattaya Beach, until moving to Chiang Rai for a child bride who was about 12 years old at the time.”
“As for this alleged threat of a lawsuit, which magically appeared when I raised the issue (nothing was sent or raised beforehand), I f**king hope he sues me,” Musk said, before adding, “There’s only one reason people go to Pattaya Beach. It isn’t where you’d go for caves, but it is where you’d go for something else. Chiang Rai is renowned for child sex trafficking.”
Last month, Musk lamented to the New York Times about how super stressful the past 12 months have been. During the 2½ hour podcast with Rogan, when he wasn’t sipping whiskey, Musk lamented, “It’s quite hard to run companies. Especially car companies. It’s very difficult to keep a car company alive.” He emphasized with emotion something he has been eager to say before — the only two American car companies that haven’t gone bankrupt are Tesla and Ford.
Increasingly Erratic Behavior
Some people are spooked by Musk’s increasingly erratic behavior. Honestly, does anyone want the fate of the world riding on the shoulders of someone who acts so irrationally? No, I am not talking about the Lunatic in Chief in Washington — I am talking about Elon Musk, evangelist for a zero-emissions, clean energy future.
Perhaps the best assessment of the situation comes from Kyle Chermocha, a writer for The Drive who penned this paragraph in a recent article: “How much longer that support can last is anyone’s guess. Even at a time where this kind of unprofessional, unbalanced conduct has been wholly normalized, Musk’s unrelenting and highly public grudge match with a private citizen stands out as truly troubling and deeply weird. He’s done a lot of impressive things at Tesla’s helm, but there comes a point where his erratic behavior crosses the line from the eccentric to inexcusable.”
I am neither a Musk lover nor a Musk hater. I put myself in neither camp. But I have been covering him for quite a while and think I see a disturbing trend developing. I only ask at what point do we stop empowering bad behavior by closing our eyes and making excuses? In the past, some have argued quite cogently that professional managers have done a piss poor job of running car companies, so why should we expect anything different if an independent CEO were installed at Tesla?
That’s an excellent question, to which I offer this rebuttal: If Musk’s mission is vital to us all, can we stand idly by as the calliope Musk has built crashes to the ground? Musk’s behavior is becoming increasingly bizarre and irrational. There is a reason so many senior executives at Tesla are leaving lucrative positions with the company and going elsewhere. Isn’t their flight from the company a warning we should all heed? I think it is.