Tesla Inc., a company owned by billionaire innovator Elon Musk that produces high performance luxury electric vehicles, has hit a bit of a rough patch in recent months, largely due to the actions of Musk, and the company’s stocks plunged deeply on Friday after Musk’s latest actions, according to The Street.
The problems actually began several months prior as Tesla was experiencing trouble meeting production expectations for a new car model that’d been developed, but things only got worse as Musk attempted to boost that flagging business.
In August, Musk suggested in a cryptic post to social media that he was considering taking the publicly-traded company private, which led to a sell-off and prompted lawsuits against Musk from investors alleging manipulation of stock prices.
But things really took a turn for the worst for Tesla after Musk took part in a two and a half-hour interview with comedian Joe Rogan for his popular podcast, during which Musk drank whiskey and smoked marijuana on camera while speaking about the difficulties he’d had in trying to “keep a car company alive.”
— Elon Musk (@elonmusk) September 7, 2018
“I’m not a regular smoker of weed,” said Musk of his on-air illegal drug use. “I don’t actually notice any effect. I don’t find that it is very good for productivity.”
While fans of Musk and pot-smokers across the country may have approved of Musk’s illicit actions on Rogan’s show, investors had a decidedly different opinion on the matter.
Shares of Tesla dropped to the lowest level in five months throughout the day on Friday and closed down about 6.3 percent, with a share price of $263.46.
That share price is well below the $420 price Musk suggested would be set if he took the business private. Just days earlier in the week, Tesla had been trading at a price around $280.74 per share, and was near $380 per share a little more than a month ago.
As if that news wasn’t already bad enough, it came on the heels of the announced departure of Tesla’s new chief accounting officer, Dave Morton, who tendered his resignation less than month after accepting the position.
“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. As a result, this caused me to reconsider my future,” said Morton in a statement.
“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,” he added.
A filing with the U.S. Securities and Exchange Commission indicated that, at least for the time being, Tesla’s accounting would be overseen by CFO Deepak Ahuja, until a new chief accountant could be hired.
Speaking of the SEC, that government agency has reportedly opened an investigation into Tesla with regard to his August 7 tweet about taking the company private, which had prompted a sell-off and caused some investors to accuse Musk of attempting to “burn” short-sellers of the stock by manipulating the share price.
On top of all of that, Musk has also taken fire — and could soon be the subject of a libel lawsuit — after he harshly criticized a British citizen who played an integral role in the rescue of a soccer team and coach from a flooded cave in Thailand. Musk had controversially alleged the British diver was a “child rapist” who’d married a child bride in the southeast Asian nation.
None of these controversies bode well for Musk and his company Tesla, and while they stand a decent chance of ultimately surviving the current downturn, albeit in a weaker condition of far less value, that is largely contingent upon Musk not doing or saying anything else stupid to scare off investors … something that obviously appears quite uncertain at this point in time.
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