Erratic and weary, Elon Musk has managed to puncture Tesla’s growth with his behavior alone.
From smoking marijuana during a live interview to calling the Englishman who helped save the 12 Thai boys stuck in a cave a “pedo,” Musk’s actions have concerned even his staunchest supporters.
Tesla’s stocks were $370.83 on June 18, but since his recent actions, have plummeted, now at $295.20 on September 14.
One factor to the corporation’s dwindling stocks may be that Musk tweeted that the British diver who saved the Thai boys in the cave was “a pedo.” Following these baseless remarks, Tesla stocks suddenly declined.
The diver, Vernon Unsworth, had previously accused Musk’s idea to create a miniature submarine to save the boys, a “PR stunt.” Whether Musk genuinely sought to save the Thai boys or whether his intent was a PR stunt, he never forgot Unsworth’s claim. Instead of berating the diver, Musk ought to have forgotten him.
After having apologized on July 18 to Unsworth, Musk called the diver a “child rapist.” Musk’s insult hurt Tesla’s image. The CEO’s failure to handle criticism caused him to relentlessly chide the Briton.
Directly after this incident, Two senior executives left the company. Chief Accounting Officer Dave Morton resigned on September 5, and head of human resources Gabrielle Toledano extended her leave of absence from a month ago.
When a CEO’s executives resign at roughly the same time, the chief should reassess their leadership. In Musk’s case, his actions have shown he has gone utterly mad, which daunts his consumers, investors and executives. It is difficult to trust a man to lead a corporation when he refuses to muzzle his baseless accusations.
In another outlandish incident, Musk smoked marijuana live on a Joe Rogan podcast interview, and following this mishap, share prices fell by seven percent soon afterwards. Although this pales in comparison to the CEO’s “pedo” gaffe, it drew attention from his own executives and investment analysts.
His behavior not only caused his shares to drop, but they are increasingly concerning his board members. In a New York Times interview, Musk confessed he used Ambien. The prescription drug, which consumers use for insomnia, yields odd side effects, such as mood changes, worsening depression, agitation, and amplified anxiety. A high dose of ambien could heighten the chief’s insecurities among other mental issues.
Nomura Instinet analyst Romit Shah deemed Tesla stock “no longer investable” in a note to investors on September 11.
Shah states that Musk tweets on average 15 times a day since May, but tweeted about four times a day in the prior 18 months.
As Shah insinuates, this spike in tweets is indeed worrisome. While some CEOs tweet more frequently, their statements will usually center around benefiting their businesses. Branding a British diver “a pedo” or “a child rapist” is neither productive nor rational. However, while on Bloomberg TV, Shah said that if Musk were to leave Tesla his departure would harm shareholders.
What has spurred Musk’s abnormal behavior?
In a New York Times interview, the CEO confessed that production targets, among other stressors, have taxed his system. Musk stated some of his friends who visited him were “really concerned.” The Tesla boss also feared that “from a personal pain standpoint, the worst is yet to come.”
In that case, what should Musk do?
Television personality and former hedge fund manager Jim Cramer urged that Musk seek medical leave. However, Musk is the face of Tesla. His departure would tarnish the brand, and his loyalists might ditch Tesla products.
Shah stated on Bloomberg TV that the Tesla boss ought to simply focus on growing his company. He states that other CEOs such as Tim Cook and Jeff Bezos don’t make headlines nearly as often, because they instead focus on growth.
Even though Cramer’s advice may improve Musk’s mental health, Shah’s suggestions are easier to follow, and would stabilize Tesla. Musk’s erratic behavior may be impulsive, but with meditation and self-care he could possibly return to growing his company. However, one more impulsive mistake could cripple his brand.