Tesla shed $ US5.4 billion after Elon Musk admitted that work stress had reached him



Updated

August 18, 2018 13:19:45

Shares of Electric Car maker Tesla dropped about 9 percent after CEO Elon Musk admitted in a newspaper interview that job stress might be the best for him.

Tesla shares closed at $ US305.50 ($ 417.56) on Friday (local time), the lowest level since 1 August, when analysts and business professors wondered whether the management of the company should leave Mr Musk or even replaced it with a more seasoned CEO.

The decline hit $ US5.4 billion Tesla's market value.

In an interview with the New York Times, Mr. Musk admitted that the most difficult & painful & # 39; was in his career.

The newspaper reported that during an hour long telephone interview Mr. Musk alternated with laughter and tears, recognizing that he was working up to 120 hours a week and sometimes took Ambien to fall asleep.

"It is rather bizarre," said Charles Elson, director of the corporate governance center at the University of Delaware.

"I Yet Musk said in the interview that he did not intend to give up his dual role as chairman and CEO of Tesla.

" If you have someone who does a better job, let me know. They can get the job done. Is there someone who can do the job better? They can now have the reins, "he said.

Board of directors supports Musk

Since the interview, the board of Tesla had not shown any action. In a statement, the directors praised – exclusive Mr. Musk himself. – the CEO's commitment to the company

"Over the past 15 years, Elons leadership in the Tesla team has led Tesla to grow from a small start-up to hundreds of thousands of cars on the road where customers love, tens of thousands of people working around the world, and creating significant shareholder value in the process, "said the statement, without addressing the recent behavior of Mr. Musk.

The interview places board members in a difficult position because Mr. Musk, who entered Tesla as an important investor and built the company into a force that strengthens the perception of electric cars. s has changed is the public identity of the company.

But Erik Gordon, a professor of law and business at the University of Michigan, said that the board of Tesla had a fiduciary commitment to shareholders to take action.

"If the board does not take him out of this gamble, at least on the basis of leave-of-absence, I think the board will be seen by many people who love the company as being estranged from their duties," Professor said. Gordon.

"You can love the company, you can love Musk and you hate to be the CEO at the moment."

The board has set up behind Mr. Musk despite bizarre behavior. In July he labeled a diver who helped rescue Thai footballers in the cave as a pedophile. He apologized later.

But a tweet that Musk fired last week, reportedly made him and the directors the target of securities regulators and can force the board to take action.

Mr Musk tweeted that he had "secured funding" to take Tesla privately and avoid the quarterly profit of Wall Street. The out-of-the-blue announcement caused a huge fight and pushed Tesla's shares by 11 percent a day, raising the value of the company by $ 6 billion.

There were several reports from the US Securities and Exchange Commission that made the disclosure, including asking board members what they knew about Mr Musk's plans. Experts said that regulators would probably investigate whether Mr Musk was honest in the tweet about the fact that he had established the financing for the deal.

In the interview with the New York Times, Mr. Musk was behind the tweet. But he told the newspaper that he wrote the tweet in a Tesla Model S while he was driving to the airport and that no one reviewed it again.

Asked if he regretted it, he said: "Why should I?" [19659003] In a separate report, The Wall Street Journal stated that securities regulators had investigated whether Tesla was misleading investors about Model 3 production problems.

The company could face penalties if regulators find it does not accurately report production delays

] Questions about Musk's future as CEO

The New York Times quoted people who were familiar with the situation as saying that the board had tried to find an executive director of No. 2 to alleviate part of the pressure on Mr. Musk.

Mr. Gordon said the board should now act or be open to lawsuits against shareholders. He proposed replacing Mr. Musk as CEO and holding him as a technical leader of a visionary.

The interview and other actions, according to Mr. Gordon, were signs. Musk could no longer cope with the position of CEO.

Mr. Musk spent nights at Tesla's Fremont, California, factory that is working out production problems on his new Model 3 car, which is supposed to bring Tesla from a niche luxury car maker to a mass producer competing with Detroit.

But Mr. Gordon said that a CEO would not live at the plant factory. Instead, he or she would form a team to work at night and solve problems.

The company said the board had formed a special commission to evaluate proposals to take the company privately. Later, it revealed that Mr. Musk had talked about the deal with the Saudi Arabian government's investment fund.

Some of the stress of Mr. Musk comes from critical short sellers who gamble against the company's success. But much of it stems from Mr Musk's own statements, such as lofty targets for the production of cars or the running of a sustained profit from this quarter, which is possibly out of reach.

Tesla has never earned money for a year and only has two profitable quarters since it became public in 2010.

AP / ABC

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First posted

August 18, 2018 12:54:45


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