This is the CEO of a $47 billion company:
A month ago, it was a $60 billion company. But that was before Tesla CEO Elon Musk went on a value-destroying bender that is shaping up as one of the worst streaks of any CEO in recent memory.
Musk has always been a provocative, bad-boy CEO—and largely gotten away with it. But his antics have now become manic, and they indicate he’s not fit to run a public company in his current state.
The craziness began on Aug. 7, when Musk tweeted that he was considering taking the electric carmaker private, and had “funding secured.” He did not have funding secured. Not even close. Musk has since abandoned the idea, but not without consequence. Tesla’s (TSLA) stock initially soared 11% on Musk’s fake news, but then plunged 36%, as lawsuits materialized and federal regulators swooped in.
As analysts wondered about Musk’s competence and stability, the brash entrepreneur told the New York Times in an interview that he’s had an “excruciating” year, with his health deteriorating, and friends worried. OK, fine, he’s only human—but it’s not encouraging that Musk tweets market-moving information while he’s driving and doesn’t even bother to inform his board of directors about a giant change he’s considering.
All the while, Musk has been ratcheting up his attacks on a British diver who assisted in the dramatic Thai cave rescue in July, repeatedly insisting he’s a pedophile and encouraging the diver to sue him. As a reminder, Tesla is a car company that has nothing to do with diving or the social welfare of children. And Musk says he works so much that barely has time to sleep.
Finally, on Sept. 7, Musk participated in a two-and-a-half hour YouTube interview with comedian Joe Rogan, at one point toking on a blunt Rogan told him was a mix of tobacco and marijuana. That’s what you see in the photo above.
Giving more ammunition to Tesla critics
Musk will likely defend the puff by saying, look, it was only one. Weed is legal in California, where the interview took place. And he didn’t bring the pot, he just accepted when offered. But, no. Given mounting questions about Musk’s mental state, providing more ammunition to critics is precisely the wrong thing to do. It shows lousy judgment and disregard for shareholders, and makes you wonder if he even knows what is happening to his company.
The day after the Rogan interview, Tesla’s chief accounting officer quit after one month on the job. The reason he gave: “The level of public attention placed on the company.” And guess where all that attention has come from: The antics of the CEO. Not from the company’s performance, not from its numbers, not from some scandal within the ranks. At almost the same time, the company’s personnel chief said she will be leaving the company, as well.
Musk is driving away talent and incinerating value. And this comes as Tesla actually seems to be fixing the flaws in its manufacturing process for the new Model 3 sedan, and approaching production targets that have long been elusive. It might even be coming close to profitability.
Any other CEO with Musk’s behavior would be long gone. Tesla, of course, is Musk’s own vision, and it’s hard to see the company operating without him. But the board doesn’t need to fire Musk. What they need to do is hire a chief operating officer to manage the company day-to-day, and help the CEO reboot, whether he needs treatment, a new perspective or just a vacation.
It’s obviously facile for an outside observer to say somebody acting strangely should get professional help. But there are billions of dollars of shareholder value at stake, which is why the usual corporate remedy for a plunging stock is simply the axe. Musk may deserve better, for now. But money is money, and even Elon Musk can only burn so much of it.
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Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman