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The public meltdown of Elon Musk

Aug 28 2018 09:19
Lloyd Gedye

How many South Africans are proudly claiming Elon Musk this month?

The enigmatic celebrity CEO of Tesla is facing calls for him to step down, as well as greater regulatory scrutiny and a shareholder backlash after his actions literally cost the company billions of dollars.

All because his Twitter-hungry fingers have ensured he makes headlines almost every other day.

In mid-August, Tesla shareholders watched their stock shed a combined $8bn, or 16% of its value, after Musk had a very public meltdown in the form of a tweet.

“Am considering taking Tesla private at $420. Funding secured,” read the tweet on 7 August.

Musk had been having conversations with Saudi Arabia’s Public Investment Fund, which had expressed interest in helping take the company private. 

But when he set his tweet loose, he had not proposed the move to the Tesla board.

Now the US Securities and Exchange Commission is investigating the Tesla CEO for his public statements around privatisation plans that may or may not have been real.

Musk has since given a tear-filled interview to The New York Times, in which he described the strain he is under. He also discussed his use of Ambien, a sedative used to treat sleeping problems.

“This past year has been the most difficult and painful year of my career,” he told the paper.

He said the now infamous tweet on taking Tesla private was typed as he drove himself to the airport.

Musk’s confessions of Ambien use and the fact that he tweets while driving have further fueled calls for the Tesla board to act.

Let’s be fair, it is not as if the tweet on taking Tesla private did not have precedent.

There was the disastrous earnings call in May this year, when Musk dismissed the analyst’s questions as “boring”.

“We’re going to go to YouTube,” he said. “Sorry, these questions are so dry, they’re killing me.”

During the same call he said Tesla has no interest in satisfying the desires of day traders. “I couldn’t care less,” he said. “Please sell our stock and don’t buy it.”

In July, Musk called Vern Unsworth, a researcher who assisted in the cave rescue of the Thai football team, a “pedo”.

What had Unsworth done to warrant such an attack from the Tesla CEO?

He had dared to suggest that a mini-sub that Tesla had offered to aid in the rescue of the young footballers “had absolutely no chance of working”.

A few days later Musk clarified that he was angry that Unsworth had dismissed his mini-sub, but admitted he should not have accused Unsworth of being a pedophile.

The whole thing would smack of a sandpit fight between toddlers if the accusation Musk so frivolously tossed at Unsworth was not so very serious.

This was a day after Tesla’s share price dipped when news broke that Unsworth was considering a lawsuit against Musk.

More recently, news broke of a Tesla whistleblower claiming that Tesla had installed eavesdropping and wiretapping equipment at its facilities in order to illegally spy on certain Tesla employees. 

In one case, Tesla security personnel are said to have unlawfully accessed an employee’s cellphone long after the company had fired him.

The whistleblower, Karl Hansen, a former member of Tesla’s internal security department and investigations division, says the spying was done at the behest of the company’s chief executive, Elon Musk.

As I said, plenty of precedent.

It’s clear by now that Musk is under severe strain.

For a start, he would do well to take a break from Twitter. In fact, one would think the Tesla board would demand it.

Speaking of the Tesla board, one question that should be asked is where they were in all of this.

Now that Musk’s Twitter habits, medical drug use and general behaviour are topics of wild speculation, what are they going to do about it?

It has been reported that the board planned to hire a new executive to take some of the pressure off of Musk.

But Musk dismissed this when asked about it by The New York Times.

“If you have anyone who can do a better job, please let me know,” he told the newspaper. “They can have the job.”

The question then remains, when will the Tesla board step in to protect shareholders?

One would hope it happens before it is all too late.

This article originally appeared in the 30 August edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

tesla  |  shareholders  |  twitter
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