It’s been a terrible 24 hours for Tesla.
The company is in utter chaos and its the stock is down 5 percent Friday morning after CEO Elon Musk smoked marijuana during a two-and-a-half-hour interview on the “Joe Rogan Experience” podcast. Marijuana is legal in the state of California where the interview was conducted on Thursday.
Musk already has a reputation for erratic behavior, especially on Twitter. He also has said that he works as much as 120 hours a week at times, which experts contend is bad for one’s mental health and can even kill you. In Japan, thousands of deaths each year are attributed to overwork, where the problem is so prevalent it even has a name: karoshi.
To make matters worse, two of the company’s top executives quit this week. Gabrielle Toledano, the company’s head of human resources, who resigned after roughly 15 months on the job.
On Tuesday, chief accountant Dave Morton tendered his resignation after starting at the company in early August. Morton said in a regulatory filing that he had no problem’s with Tesla’s financial reporting and he was resigning largely because of the outside scrutiny the company faces.
“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. 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 said in the filing.
Tesla has often had problems with high turnover. This year alone its heads of both sales and finance, Morton’s predecessor and a number of senior engineers have all left the company.
Adding to the bad day for Tesla, a lawsuit was filed Thursday by short-seller Andrew Left on the grounds that Musk damaged all shareholders when he tweeted he had secured funding to take the company private on Aug. 7. Tesla stock jumped 11 percent that day but subsequently dipped after Musk said funding wasn’t locked down.
Then on Aug. 24, Musk said a deal to go private was off and the company would remain publicly traded. The lawsuit is seeking class action status to represent all shareholders.
Tesla has declined to comment on the lawsuit.
Left is the editor of the Citron Research investment newsletter. He is alleging that Musk tried to “burn” short-sellers who borrow Tesla stock in hopes that the price will fall and they can trade shares at a lower cost. The lawsuit claims Musk “artificially manipulated the price of Tesla securities by issuing materially false and misleading information.”
The company also is being investigated by the Securities and Exchange Commission over the go-private tweets.
