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Losing a major person in your company can be considered a misfortune; losing two in a week is like being carefree. You do not have to be good at numbers to understand that it's not exactly a stellar optics.
CNBC reported that the chief accounting officer, David Morton, left Tesla on Friday – after about a month in the concert – because he felt Musk was not taking his advice on the private market. (The former head of accounting left in March.) Michael Hiltzik at the Los Angeles Times says "it is conceivable that he saw something in the books that frightened him".
Then, Wednesday, Bloomberg announced the departure of Justin McAnear, vice president of global finance at Tesla. McAnear is going to take a CFO gig in a yet unknown company. And these are just the people of the money! Gabrielle Toledano, Tesla's director of human resources, took over the company the same day as Morton, as did the company's vice president of communications. Thirty-ish of other leaders left the company since June.
And in the middle of all this turnover, what does Elon Musk do? Last Friday, I had just come out of Glacier National Park and hit Browning, Montana, when I received the first cell service in a few days. I've opened Twitter. And the first thing I saw was a GIF of Elon Musk smoking a little. I will summarize the speeches in the form of the refrain of "The slippery people:" by Talking Heads
What is his problem?
He is fine.
How do you know?
The Lord will not have spirit.
Do not play games.
He is fine.
Love from the bottom up.
Turn like a wheel.
He is fine.
See for yourself.
The Lord will not have spirit.
We will move now – spinning like a wheel in a wheel – a discussion of why smoking dominated the news cycle around this podcast. There was a number of other interesting things discussed! Musk has put forward a flying vehicle design that he has not (yet) planned to pursue and has suggested that serious news from Neuralink be forthcoming. So, why are people focused on the blunt?
I've already written about the competing stories around Musk; a common thread in the history of his erratic behavior is related to the alleged use of drugs, although the drug cited in this case is Ambien, not the weed, and the concern was precisely Ambien feeding his tweets more wild.
I have an idea of why the blunt illuminated the net, and it has to do with symbolism. The CEO is the human face of a sprawling abstract organization. In general, CEOs try to project discipline, calm, and feel that regardless of internal conflicts, everything is under control. Tim Cook gave us a perfect example this week. The Apple event for which he served as hypeman was an almost painfully controlled presentation, and he sent the message that the company was created.
Apple does not have Tesla's luggage. It is not necessary to signal everything is under control to reassure anyone. But this is the kind of signage that reassures investors and the public. So, after all these wild tweets, high level starts and manufacturing problems, you could expect Musk to have a firm hand on the wheel. Instead, he poured a whiskey and hit a shot.
I'm focusing on Apple in part because Tesla fans are making the comparison themselves. "The only point comparable to Tesla's brand recognition is Apple, in our opinion," wrote Nomura Instinet analyst Romit Shah, in a research note published this week. Shah specifically cited Musk's "erratic behavior" as a risk for Tesla, suggesting that Musk's antics distract Tesla's attention. The memo features graphs of Musk's Twitter activity per month, as well as a chronology of recent Musk controversies, to argue Shah's point of view.
While Shah has faith in Tesla as a society ("Tesla is well positioned to generate unprecedented revenue growth and make substantial profits," he said), he also believes the company needs "better leadership."
Shah is not alone. Baillie Gifford, Tesla's largest institutional investor, said he had discussed with the SEC the abandoned "go private" plan that Musk had launched last month. And the wealth manager James Anderson said Reuters that Musk "needs help, and I say it psychologically as much as practically". Cool, stop acting crazy.
Now, managing most of Musk's public appearances has served him well with his fan base; this gives him a kind of authenticity that Cook lacks. Loose performances and whiskey-weed are the kind of thing that connects a lot of Musk fans – especially on YouTube.
Most people do not have the time to become familiar with Tesla's financial services, even if they have enough financial knowledge to understand them. And I can only speak for myself, but I do not look at the state of health of a company before buying a consumer product. Most consumers follow the sentiment instead. In recent times, this feeling has not been very positive: Tesla's cars are delivered with flaws; customer service was a "nightmare"; and just this week, Tesla has reduced the colors it offered for Model 3. Oh, yes, and there's also an embarrassing thing about a Tesla crashing out of a garage using its Summon function? In addition, Tesla has about $ 10 billion in debt, has no annual profit, and is losing a lot of talent.
Tesla does not advertise, so it depends on appearances of "earned media" of Musk (it's the technical name that calls it!) To help establish the feeling. And now that the long-term stability of society is causing real concern, it's a little strange to see the CEO sipping whiskey and smoking marijuana like he has nothing to do in the world. This is not exactly the kind of feeling felt by people who feel comfortable about the future of Tesla.
Countless shareholders seem to believe that chaos is the key to Tesla's success as Tesla shares rose this week after falling last Friday. But even their confidence can slip: the options data suggest that Tesla's stock holding is "close to the riskiest it has ever been", according to Reuters. This is not everything. The price of Tesla's high-risk bonds also dropped to around 85 cents a dollar last week, according to MarketWatch.
This will seem quite familiar to longtime Muskwatchers who navigate the public's feeling that sometimes seems like a very strange roller coaster ride. Musk is not going anywhere. Even if the jury wanted to eject him, I think you should drag him and shout at him, leaving marks of claws on his desk. There is a lot of noise but nothing really indicates that something will change anytime soon.
In the end, either Tesla will become profitable, as Musk suggested this year, or the market will lose patience. But this week in Elon looks a bit like Groundhog Day: another week of screaming with no obvious result. Turn like a wheel into a wheel.
with reportage by Sean O'Kane
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