Tesla stock slumps after Elon Musk admits he’s having most difficult year of his career

Alan Boyle
Updated
Image: Elon Musk
Tesla CEO Elon Musk presided over the company’s SolarCity merger in 2016. (Tesla via YouTube)

When Tesla CEO Elon Musk chokes up, Tesla’s stock price gets depressed as well.

The link between public perceptions of the tech billionaire’s mental state and the financial state of his publicly traded company was evident today, in the wake of a New York Times interview that quoted Musk as acknowledging he was fraying.

“This past year has been the most difficult and painful year of my career,” Musk told the Times. “It was excruciating.”

Today’s trend line for Tesla’s stock was excruciating as well, with a nearly 9 percent drop to $305.50 a share.

The Times quoted Musk as saying that his physical health has been “not that great” due to Tesla’s turmoil. The company, which makes electric cars as well as batteries and solar panels, has been hit by questions about the production ramp-up for its Tesla Model 3 car and its workplace practices.

Earlier this month, Musk floated the idea of frustrating the stock’s short-sellers by taking the company private. That boosted share prices to nearly $380, but also spurred questions about Musk’s Twitter comment that the funding for the maneuver had been “secured.”

In the interview published today, Musk basically acknowledged that his tweets had blindsided Tesla’s board members. The Securities and Exchange Commission issued subpoenas to Musk and Tesla’s board, and interviews are reportedly being planned for as soon as next week.

Musk said he occasionally takes Ambien to help him sleep. “It is often a choice of no sleep or Ambien,” he told the Times. The article quoted one source as saying some board members are worried that Musk is tweeting on Ambien, and referred to concerns about occasional recreational-drug use.

The Times also quoted Musk as saying that Tesla tried to recruit Facebook executive Sheryl Sandberg a couple of years ago to serve as the company’s No. 2 executive under Musk — a role similar to that filled by Gwynne Shotwell as president of SpaceX, Musk’s privately held space venture.

Musk said he wasn’t aware that the search for such an executive was currently active, but the Times quoted other sources as saying a search was indeed underway.

In addition to his CEO roles at Tesla and SpaceX, Musk is the founder of a tunneling venture called the Boring Company; co-founder of Neuralink, which is working on brain-computer interfaces; a co-founder of OpenAI and the inventor of the open-source Hyperloop rapid transit concept.

Tesla’s board provided the Times with a statement supportive of Musk’s leadership, and Musk said he had no plans to relinquish his role as Tesla’s chairman and CEO. But Musk’s interview with the Times made it sound as if he was being pushed to the limit.

“If you have anyone who can do a better job, please let me know. They can have the job,” Musk was quoted as saying. “Is there someone who can do the job better? They can have the reins right now.”

Erik Gordon, a University of Michigan business and law professor, told The Associated Press that Tesla’s board now has a fiduciary duty to shareholders to take action.

“If the board does not get him out of this slot at a minimum on a leave of absence basis, I think the board is going to be seen by a lot of people who love the company as being derelict in their duties,” AP quoted Gordon as saying. “You can love the company, you can love Musk and hate having him be the CEO at this point.”

The market response to the Times interview, however, suggests that Tesla without Musk might be a very different company.

For more about Musk’s state of mind, including the reason he settled on $420 as the target price for a buyback of Tesla shares, check out the Times interview. This report has been updated with today’s closing price for Tesla shares.

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