Tesla rocked by executive departures, Musk web show; stock plunges 10%2 min read . Updated: 07 Sep 2018, 07:48 PM IST
Tesla shares see steepest intra-day drop since June 2016 after accounting chief, HR head resign on the same day, CEO Musk smokes marijuana during interview
San Francisco: The turmoil at Tesla Inc. reached a fever pitch on Friday, as news emerged that two senior executives will leave Elon Musk’s electric car maker a matter of hours after he smoked marijuana during an hours-long interview with a comedian.
Chief Accounting Officer Dave Morton gave notice on Tuesday that he was resigning less than a month into the job, according to a 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 CFO for computer-drive maker Seagate Technology Plc, 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 in the process drew a subpoena from the Securities and Exchange Commission and a series of lawsuits alleging market manipulation.
“Since I joined Tesla on 6 August, 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 as much as 10% to $252.25 as of 9:46 a.m. in New York, the steepest intra-day drop since June 2016. The company’s 5.3 percent bonds dropped 1.75 cents to 84 cents on the dollar, a record low, according to Trace bond price data. That gives the notes, which are senior unsecured and due in 2025, an effective yield of about 8.4%.
Tesla has long struggled with high turnover among its senior executive ranks, and its finance team in particular has gone through significant tumult lately. 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 in 2017 after his successor, Jason Wheeler, quit after just 15 months.
By leaving, Morton walked away from a $10 million new-hire equity grant that would have vested over four years.
Musk, 47, sipped whiskey and smoked marijuana during a more than 2 1/2-hour podcast with comedian Joe Rogan late Thursday that touched on everything from flame throwers and artificial intelligence to the end of the universe. “I’m not a regular smoker of weed," Musk said on the podcast, which is streamed live. He took one drag from what Rogan described as a joint containing tobacco mixed with marijuana, which is legal in California.