Why Tesla Stock Was Hit Hard Friday

Daniel Fowler
September 10, 2018

The latest guest on the popular Joe Rogan Experience podcast, Musk talked to the former Fear Factor host-turned-libertarian media star for three hours, touching on subjects from stockholder expectations to electric jets.

Tesla Inc Chief Executive Elon Musk was filmed smoking marijuana, drinking whiskey and wielding a sword just hours before the automaker said its accounting chief would leave after a one-month stint, the latest in a string of unusual behavior and executive departures that have stunned investors.

Rogan asked Musk about The Boring Company, which Musk said started as a " joke", mostly borne out of his desperation to fix L.A.'s notoriously bad traffic problem.

In a subsequent email in response to a question about whether Tesla drug tests employees, Musk wrote: "Our policy allows trace amounts of THC during work times, provided they are below the safety limit (much like a minimum alcohol level)".

Tesla shares dropped sharply Friday after the electric-car company disclosed that its chief of accounting was leaving the company only weeks after coming aboard.

Along with his electric vehicle company, Musk heads up space exploration firm Space X, tunnel construction firm The Boring Company, and Neuralink, which works on augmenting human brains with artificial intelligence.

On Friday, Tesla shares dropped to almost $252 - their biggest single-day drop in two years after Musk was seen smoking weed on the show.

The blunt usage began near the end of the interview when Rogan produced it and Musk responded by asking, "I mean, it's legal, right?"

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"His actions directly affect Tesla's share price because Elon is Tesla".

The turmoil followed a chaotic month which saw Musk propose and then abruptly call off a plan to take the company private.

In an interview with The New York Times, Musk denied the allegations. "There's a skill set that needs to be added at the top that Mr. Musk doesn't have".

He said: I think the future in where we are a space-faring civilisation out there among the stars, that is very exciting.

Morton, who is walking away from a $350,000 base salary and a $10 million new-hire stock grant that would vest over four years, said he believes "strongly" in Tesla and that he had no disagreements with the company's leadership or its financial reporting.

On Aug. 24, more than two weeks after blindsiding employees and investors with the tweet, Musk chose to keep Tesla a public company. Moody's Investor Service downgraded the company's debt into junk territory back in March, warning that Tesla won't have cash to cover $3.7 billion for normal operations, capital expenses and debt that comes due early next year.

The two lawsuits were filed three days after Mr Musk announced on Twitter that planned to take Tesla private in a record $72bn (£56bn) transaction.

Indeed, Tesla's board is rumored to be searching for another executive to help Musk.

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