Tesla shares tumble after Musk tells of exhaustion
Washington — Tesla shares took a pounding on Friday amid fresh fears about the future of the electric carmaker after an interview with CEO Elon Musk in which he revealed his struggles with exhaustion and a lengthy but unsuccessful effort to find a number two executive.
Tesla shares skidded 8.9% to $305.50 following the publication of the interview with The New York Times.
Musk opened up to the newspaper about the personal toll he said he had endured, working marathon hours trying to ensure that deadlines are met, with Tesla ramping up production of its Model 3 sedan.
"There were times when I didn’t leave the factory for three or four days," Musk said. "This past year has been the most difficult and painful year of my career. It was excruciating."
Musk revealed he needed to take medication to sleep during the latest ordeals and said he had approached Facebook COO Sheryl Sandberg about becoming his number two at Tesla.
HE IS ONE GUY AND HE HAS MULTIPLE COMPANIES. ANY ONE OF THOSE REQUIRES THE FULL ATTENTION OF THE CEO.
The brash South African-born entrepreneur also sought to explain his tweet earlier in August about taking Tesla private, which has drawn scrutiny from regulators. He explained that the tweet — claiming assurance that funding for going private was secured — was an attempt to be transparent, even though it provoked questions about whether it violated stock market regulations.
He and other board members are preparing to meet Securities and Exchange Commission officials, the Times said.
Musk, who envisions sending tourists to the moon with his private firm SpaceX and has unveiled ambitious plans for high-speed trains and other projects, is recognised as one of the most influential innovators in the US.
"Part of the issue from my perspective is focus," said Roger Kay, an analyst and consultant with Endpoint Technologies Associates. "He is one guy and he has multiple companies. Any one of those requires the full attention of the CEO."
Kay said the comment on his personal issues "is not going to get him any sympathy", but added: "It’s not a question of whether he is likable, what matters is whether he can function."
Kay noted "there isn’t anyone who can pick up the slack for him. But he needs to get that person in place pretty quick."
Art Hogan, chief market strategist for B Riley FBR, said the interview "did not improve the image of the company or the CEO", while adding to uncertainty about Tesla’s future.
"If we say we simply remove Elon Musk from the situation, I don’t know if that does much good. I don’t know what the bench looks like behind him," Hogan said.
Tesla produced slightly over 100,000 vehicles in 2017 and the company has been struggling to boost production of its Model 3, which is less expensive than its first models and could help expand Tesla’s base.
On the physical toll his job is taking, Musk said: "It’s not been great, actually. I’ve had friends come by who are really concerned." He described spending every hour of his 47th birthday in June at work and almost missing his brother’s wedding.
Musk explained in a blog post last week that his much-scrutinised statements about financing were based on his conversations with Saudi Arabia’s sovereign wealth fund and other investors.
If delisted, Tesla could operate without requirements for financial reports and other pressures of a publicly traded firm. However, it could also lose visibility and limit its ability to raise capital.
Musk told the Times that board members had not complained to him about his tweet.
He added he had agreed not to tweet again about taking the firm private unless he had discussed it with the board.