Freaked out by Elon Musk's exuberant tweets Tesla board is lawyering up

21 August, 2018, 02:49 | Author: Salvatore Jensen
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Tesla CEO Elon Musk says that no colleagues from Tesla signed off on last week's tweet about his plan to take the electric auto company private prior to the tweet's posting, per a New York Times report published on Thursday.

In the interview, Musk, alternating between laughter and tears, told the New York Times the struggle over the previous year to get production of the Model 3 going at full speed was "excruciating".

Investors must have gotten unnerved.

That means investors shorting Tesla on Friday recovered the majority of what they lost after Musk's now-infamous August 7 tweet, in which he floated the idea of taking Tesla private.

Musk's decision to tweet his plans for taking the company private while on the way to the airport has resulted in an investigation by the Securities and Exchange Commission. Nearly a week later, the chief executive officer said the basis for his statement was conversations with Saudi Arabia's Public Investment Fund, which first expressed interest in helping take the company private in early 2017.

Tesla executives have expressed concern at Elon Musk's use of the sleeping pill Ambien, reportedly suggesting it could account for his erratic tweeting and unusual behaviour. Even with this week's losses, Tesla's market value is $52.12 billion, slightly higher than General Motors.

The stunning announcement sent Tesla's stock on a wild ride, prompting lawsuits and reportedly drawing scrutiny from regulators.

Musk also denied having smoked weed before sending the tweet, but did mention he sometimes takes Ambien to help him sleep.

"It is often a choice of no sleep or Ambien", he said, referring to an insomnia medication.

While the interview raised more questions about Musk's mental state and fitness to run the company, it also shed light on how he crafted the tweet about taking his firm private.

Money-losing Tesla has been burning through cash as it has aggressively ramped up Model 3 production, a process Musk has called "production hell".

After Musk, the next most senior managers at Tesla are Chief Technical Officer JB Straubel, and Deepak Ahuja, the company's chief financial officer. They can force Musk to step down, take a leave of absence, or delegate some responsibilities to other executives.

"I thought the worst of it was over", he told The New York Times.

If Tesla directors are anxious about Musk - and they should be - here is advice for them: Do your jobs.

The report cited sources saying Tesla is trying to find an executive to help relieve some of the pressure on Musk. "Is there someone who can do the job better?"

Some of Mr Musk's stress comes from critical short-sellers who are betting against the company's success.

Tesla has always been the most-shorted stock in the USA, according to data from the financial analytics from S3 partners, and that persistence has agitated Musk for some time. As far as the SEC is concerned, the question is whether Musk and others from the company's management misled shareholders about the cause of the delays or their extent.

Elson said most of the company's directors have relationships with Musk, who owns about 20 percent of the company.



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