Billionaire CEO of Tesla & SpaceX Elon Musk smokes Marijuana on webcast amidst company turmoil

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Elon Musk billionaire CEO of TESLA

Tesla Inc. chief executive Elon Musk was filmed smoking marijuana, drinking whisky and wielding a sword just hours before the automaker said its accounting chief would leave after a one-month stint, the latest in a string of unusual behaviour and executive departures that have stunned investors.
Shares of the electric carmaker tumbled as much as 10 per cent on Friday, with investors on edge after a tumultuous August during which Musk proposed and then abruptly pulled the plug on a go-private deal.

Chief accounting officer Dave Morton resigned because of discomfort with the attention on the company and pace of work during that time, Tesla said in a filing on Friday.

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Morton, whose departure comes after the U.S. Securities and Exchange Commission opened an inquiry into Musk’s aborted plan, joins a list of executives who have left Tesla recently.
Bloomberg reported on Friday that chief people officer Gaby Toledano would not return from a leave of absence just over a year after joining.
“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,” Morton said in the filing.
Late on Thursday, Musk was filmed drinking whisky, briefly smoking marijuana and wielding a Samurai sword during a 2½-hour live web show with comedian Joe Rogan that swiftly spread across Instagram and other social media.

Taking a puff from a joint, which Rogan said was a blend of tobacco and marijuana, and legal in California, Musk said he “almost never” smoked.
“I’m not a regular smoker of weed,” Musk said. “I don’t actually notice any effect … I don’t find that it is very good for productivity.”

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It was the latest in a string of unconventional behaviour by the billionaire South African native who is also CEO of rocket startup SpaceX.

Even before Musk’s surprise Aug. 7 tweet that he had funding “secured” for a go-private deal, Tesla had been under scrutiny from investors, analysts and short-sellers as it works to hit production targets and slow its cash burn.

Morton, who is walking away from a $350,000 US base salary and a $10-million new-hire stock grant that would vest over four years, said he believes “strongly” in Tesla and that he had no disagreements with the company’s leadership or its financial reporting.

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Analysts on Friday reiterated their call for Tesla to bring in another senior leader as it strives to expand production and potentially raise more capital. Musk has said he expects the company could turn profitable in the second half of this year.

“We have been calling for a co-CEO or COO to assist to codifying the leadership structure and in so doing, the culture at Tesla,” said James Albertine, analyst at brokerage Consumer Edge.
“We think this is further evidence that the time is now for management and the board to address these issues.”

Sobering effect on investors

Tesla’s $1.8-billion junk bond maturing in August 2025 plunged as much as four cents on the dollar to below 82 cents, a record low, in Friday trading, pushing the yield above 8.8 per cent.
Coupled with an upfront cost of 21 per cent of insured value, it now costs an investor around $280,000 to insure $1 million of Tesla debt for a year.

Elon Musk smokes Marijuana

Musk’s behaviour has raised concerns about his leadership and several analysts have called for the company to appoint a strong No. 2 to prop up Tesla’s operations. (Evan Vucci/Associated Press)

With Tesla’s stock falling to its lowest level since April, short-sellers added 810,000 shares to their positions, bringing the total as of Thursday to about 32.6 million shares, according to S3 Partners, a financial technology and analytics firm.

Tesla has told investors it expects to turn a profit in the second half of this year, a forecast the company’s head of investor relations, Martin Viecha, reiterated at a conference earlier this week sponsored by RBC Capital Markets, RBC analyst Joseph Spak wrote in a note on Thursday.

Viecha also restated Tesla’s forecast that it will build 50,000 to 55,000 of its Model 3 sedans in the current quarter, and indicated the company’s working capital will improve as production increases, Spak wrote.

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Prominent short-seller Andrew Left has sued Tesla and Musk, saying in his suit that Musk’s issuance of materially false and misleading information related to his abandoned plan harmed both short-sellers and those hoping the stock would rise.
Tesla shares were last down seven per cent at $261.37 on Friday afternoon. The price of Tesla’s junk bond also sank and the cost to insure the debt soared.

 

Source: CBC

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