The biggest pattern is that the entire automotive industry is changing course in a big hurry, in the direction of electric cars. All of Tesla's executives are now in very high demand with lots of offers coming their way.
That's still a problem in its own right if Tesla can't retain its top talent. Why are they so uncompetitive? Are the working conditions miserable? They're worth on par with the biggest automobile manufacturers, so surely they should be able to pay competitive stock options!
Also, many of the departing people are just leaving. They're not being poached by competitors, they're just leaving. Something smells fishy.
They don't actually make money and their largest competitors have literal billions in cash on hand to buy off their entire labor force if they so chose?
Amazon's been losing money since they started but seem to have thrived nonetheless. I wonder if their finance guys have some insight into how that works for them?
I think between Musk's incredible requirements for his associates (burning people out), and the awkward shape his business is in (notwithstanding his own interruptions), he's really asking a lot from those who operate and keep the boat afloat. However, what an experience it must be to work with Elon Musk.
Do you have anywhere I could read the list of people who have left? I tried searching but all I can find are a bunch of either outdated or one-off articles.
Like a week or 2 ago saw a bunch of beautiful headlines like this:
- Tesla's stock is getting crushed after TWO EXECUTIVES JUMP SHIP and CEO Elon Musk smokes weed [1]
- Tesla ERUPTS IN CHAOS After Senior Execs Leave, Musk Tokes Up [2]
Only to read internally it was a bit more tame than "JUMPING SHIP!!!!!":
> "As many of you know, Tesla’s Chief People Officer Gaby Toledano has been on leave for a few months to spend more time with her family and has decided to continue doing so for personal reasons. She’s been amazing and I’m very grateful for everything she’s done for Tesla." [3]
So the executive was on LOA for multiple months beforehand? Seems really disingenuous to craft headlines like that. Does anyone have more detail?
But then again and to be fair, anything from Tesla would do serious controlled messaging.
Point is, with all Tesla news, I'm not even sure what to believe anymore. I see headline like this, and my first thought is "Is this even true?". Maybe Tesla is really as in trouble as these headlines lead on, maybe they are not. Maybe Elon has "gone mad" and tanking the stock to go private. Maybe it's just trendy and fun to write negative news against Tesla's stock valuation right now. Who knows what's actually happening.
It's all just a bit too much reading in between the lines anymore... Just SHOW ME THE NUMBERS next earnings report and I'll decide for myself.
What's actually happening is executives are leaving. Many more of them than is normal in such a short time. That's what's actually happening.
Why that's happening is certainly open for debate, but there are no answers to "why" that are good. The only reason that wouldn't suck is that it's just a coincidence that they don't want to be there. But keep in mind, one of the finance people was new to the company and quit. To me that says they walked in, saw what was happening and said "yeah, sorry, no." But that's speculation on my part. We should stick to the facts - an unusual number of executives have been leaving the company in a short time.
> Many more of them than is normal in such a short time.
They have 37,000 employees. If 1% of them are "executives" and the average executive stays for five years, the mean time between executive departures would be five days. Are they actually averaging significantly more than one departure every five days?
Look at the 8k filings, they are easy to find on Yahoo finance and show corporate officer departures/arrivals.
There are a lot of them for a company like Tesla. People join for the big payout — when corporate big shots suddenly find reward in spending time with family, you need to ask questions.
> Look at the 8k filings, they are easy to find on Yahoo finance and show corporate officer departures/arrivals.
Since the beginning of the year I see this business everyone was talking about last week with the Chief Accounting Officer, and then one for the Director of Manufacturing and Engineering and one for the President of Global Sales and Service. Is this supposed to be an unusually large number? The other 8-K filings do not appear to be related to departures/arrivals.
By comparison, in the same time period GM replaced their CAO, their CFO and a member of the board.
The numbers in both cases would obviously be higher if you broaden the category to include lower positions that don't make the 8-K filings like the Tesla VP in the current story, but people are saying "look how many" without specifying the breadth of the pool or how many should be expected.
> The GM CFO retired after 40 years with the company. The GM CAO left for another job and gave 90 days notice. It’s a little different.
The original claim was that the number of departures was high. Comparing the number of departures, there does not appear to be a large disparity.
You raise the question of the context. The first Tesla CAO left citing personal reasons. The conspiracy theory is that this is a dog whistle for some kind of accounting irregularities, but as far as I know neither he nor anyone else with actual knowledge has even suggested that as a motive. What actual evidence is there that he didn't honestly leave for personal reasons?
The whole "funding secured" drama literally happened on his second day and he didn't like it.
Nothing about that episode is super inspiring and his reaction is entirely understandable, but how is this supposed to spell doom for the company?
Meanwhile the other departures seem to be for the normal reasons with people in a low unemployment job market finding another job somewhere else and that sort of thing.
But given the drama, now people are looking under every rock for something to gossip about.
If someone takes a "leave of absence" that ends up lasting several months, and that becomes a permanent leave of absence (read: they quit), that does indicate problems. Not in a one-off scenario, but in Tesla's case where they've lost dozens of executives once they realized that [possible bias here] Tesla is clearly engaging in fraud, it's not just a one-off thing. The smart executives are jumping ship, leaving behind either a) the not so smart executives or b) the smart people like Straubel who are close enough to Elon that they wouldn't leave.
see: bogus solarcity acquisition to avoid the dominos falling in Musk's highly coupled empire, clear intent to cause a short squeeze with the bullshit going private tweet [if you look at musk's actions/statements leading up to that, it's clear the shorts have been stressing him out], Musk having borrowed money to purchase even more Tesla shares, worker injury rate [this isn't fraud but I decided to throw it in there], etc etc etc
The Tesla fans are oblivious to all of this sort of news. It's all "minor" and they can't seem to see how problematic it is in aggregate.
There is a huge gap between what these people think is happening (Tesla is taking over the world!) and reality. This company could go under and they wouldn't believe it. I've never seen anything like it.
Almost every executive tasked with showing you the financial numbers is leaving or has left what should be one of the hottest/sexiest startups of our time. Many of them have left with stock options still on the table.
That should say more than the numbers do by themselves.
- Missing weekly production targets (currently at ~15%)
- Burning through cash reserves (-34% YTD)
- Increasing liabilities (+20% YTD)
This is all while there are Model 3 quality issues, and refusing a cash injection from VW. The solarcity acquisition was questionable as well, considering Musk founded solarcity, and now there is a lawsuit by Tesla investors against him.
Some investors are still cutting the CEO slack because of his previous success with Paypal, but automobile manufacturing is a different beast.
> Some investors are still cutting the CEO slack because of his previous success with Paypal, but automobile manufacturing is a different beast.
There's a lot more to it than that though. Telsa is a huge achievement already. They've not only created cars that a lot of people love, they disrupted and accelerated an entire industry.
Oh I agree, but Tesla's value seems to be in the IP at the moment, not automobile production. That's why VW would have been such an ideal partner, because VW knows mass automobile production (but Musk nixed it).
SpaceX is great too but I would say it's still a little too early to say it's as successful as Paypal was.
Elon has always marketed Tesla and himself with Hollywood like publicity. It's not surprising some of the headlines read like tabloids. Whether they're true or not who knows? As long as Elon is in the limelight they'll be around.
Didn’t Dave Morton leave in under a month? That feels pretty “jumping ship” to me at least. It’s also worth remembering that “Musk smokes weed” was the tail end of something that really began with “Musk calls hero pedophile online, then doubles down on it,” and “Musk brings down SEC with bullshit ‘funding secured’ line.”
There’s some hysterical headlines because they get clicks, but Musk has been doing the hard work of tanking his image and hurting Tesla without a bit of help.
> So the executive was on LOA for multiple months beforehand?
Without the benefit of the internal memo, I would have assumed maternity leave and deciding not to come back. It's common. With the memo though, it sounds like she may have been caring for another family member, or some similar situation, and just decided it isn't worth it to come back.
While I agree that the first two titles are clickbait, every single executive leaves to spend "time with their family". It's such a trope that you cannot take that sentence at face value.
Tesla is the most shorted stock in history and "News" has nothing to do with facts or events, it's purely entertainment and perception management. When someone wants you to believe a certain point of view, the "news" will make it so.
Ah, yes the famous "news" conspiracy consisting of thousands of anonymous people who don't coordinate their activities with each other but are all somehow trying to bring down Tesla by independently reporting actual things that Musk or Tesla have said or done.
Or, Occam's Razor: the news is reporting this stuff because Musk made it newsworthy by constantly hyping and over-promising in the past. As a consequence of this self-initiated publicity, negative events concerning Musk and Tesla are now considered newsworthy, even if they wouldn't be for other executives/companies.
That being said, no matter what company you are, losing 5 C-suite executives in less than a year is extremely disturbing news and in almost all cases is usually followed by the company declaring bankruptcy in some form within a few months.
Some parallels with Uber here (minus the extreme culture issues) - semi-reckless CEO with Godly following, series of departures, constant fire from the media. But unlike Uber I don't think Tesla will see a new CEO. And that is good.
Real answer: Tesla would be acquired before filing for Chapter 7 bankruptcy.
Theoretical answer: The cars would continue to function as cars, but network-dependent features like Autopilot and remote unlocking/monitoring would cease.
Yep - warranties are pretty much voided if the manufacturer goes bankrupt. Unlike bond holders, warranty holders are last in line for being remunerated.
> Tesla’s Enhanced Autopilot software has begun rolling out and features will continue to be introduced as validation is completed, subject to regulatory approval.
Not entirely. When they had a recent network outage, site down and such I lost my phone app. It could not talk to the car as it apparently goes to Tesla first. However I was able to unlock, start, and drive just fine. Autopilot, both the traffic aware cruise control and auto steer, worked without issue.
now I did not need to use a super charger but one would hope they don't need network access to work and would just keep a local database of cars that are allowed. would be damn silly to require a call to the mothership for each charging session.
While someone else replied, I feel it's worth putting this more strongly: this is categorically untrue. Chapter 7 provides for "the sale of a debtor's nonexempt property and the distribution of proceeds to creditors."
There is virtually no question that the Supercharger network will be bought by someone in the event of Tesla going under -- another car company, or another company that already operates a charging network, or even a new company formed to run the network. The new owner would almost certainly open it up to non-Tesla customers if that's at all possible, too. I don't think this is just true of this network, either; I have little doubt that all of Tesla will be bought if they collapse, although they might be broken up and bought piecemeal.
If I was forced to make a prediction for Tesla's fate, though, this wouldn't be it. I think it's most likely that Tesla will be bought in total by another carmaker within four years, and it will continue as a semi-independent brand for years past that, with its technology being diffused through the rest of their new owner's properties -- and vice-versa.
What I would like to know is what super-systems are required to be run by someone in the event of tesla going out of business/some-thing-else-bad happening to them...
But, it begs a question about such system in the long-term. If we look at the electric car segment of all transport, as it replaces ICEs over time - the systems they rely on to function are bigger than a single brand.
A Chapter 7 bankruptcy is basically a liquidation sale, meaning the assets get sold to the highest bidder. It is possible that the chargers could get sold, in which case they would remain in service (or in existence, i.e., as collectibles). But they would only get destroyed if they aren't sold.
No. There may be some enormously expensive, 3rd party service that springs up to fill demand for custom fixes with the machines, but warranty holders get nothing if the company goes bankrupt and dissolves liabilities.
Once there's no company that can prevent people from tinkering with their cars (by threatening to sue/end your ability to be hireable in the industry), someone will probably figure out how to get a custom firmware running on it.
ask Fisker Karma owners. At least in case of Tesla one can expect a robust cottage industry to quickly spring up, not just one small shop of former Fisker engineers which will bleed you dry.
Tesla delivers more cars in a few days that Fisker did in their entire history. The two really wouldn't be close in either demand or supply for ongoing servicing.
I have to ask the question, why isn't there one already in that case? Is everyone really putting up with the high pricing and very long parts delays reportedly associated with repairs the OEM experience entails?
I am assuming there is some copyright thing going on. There is also not much pressure for Tesla owners to look for alternatives as long as Tesla is around so the potential volume is low.
Funny how when an exec leaves and the stock drops, the media goes crazy over the stock price. But when an exec leaves and the stock rises, the headline isn't screaming "TSLA up nearly 4% as exec leaves company".
It begs the question: What is the reason for any valuation of the stock price? It's all wild speculation on future potential earnings, price to book is very high.
So everybody seems to be getting a bit skiddish because of Elon's recent behavior. The question to me is, are these people departing because Tesla is a house of cards and Elon is shaking the table? Or are they leaving because they believe Elon threatens even a stable company what with the SEC investigation and everything?
I'd love to be a fly on the wall for the after drinks conversations between finance people in TSLA.
Finance people don't change jobs that frequently. They usually spend years at gigs before leaving.
It is especially unusual for finance executives to leave so shortly after joining a new company. Barring serious family issues, it generally indicates serious financial problems at the new employer.
They’re leaving because they can make a lot more money elsewhere. TSLA has been very volatile while everything else has been going hockey stick for the past two years.
They are probably leaving because Elon works them like he works his engineers. They want nice cushy executive jobs and Elon does not give those to them. Finance people are a dime a dozen. It's not as if any actual irreplaceable knowledge is being lost here.
Any knowledge which wasn't transferred into a document of some kind will either be lost or have to be re-learned by experience.
High turnover in any sector is terrible for business. This is true even for relatively "unskilled" labor: informal, often unwritten practices between workers are essential to any kind of collaborative work. See the "slightly different sense" here: https://en.wikipedia.org/wiki/Work-to-rule
Finance workers are used to working insane hours, especially on Wall St., so I'm not sure I buy that. My theory - finance people are more familiar with the law and less willing to skirt it. They know the consequence can lead to them personally going to jail or getting their CPA revoked.
It depends on the role. If you rise into a position where you are managing customer relationships or otherwise have a P&L that is directly attributable to you, your hours become - not necessarily shorter - but not the primary thing you are judged on. An M&A banker who spends two days a week on the golf course and only rolls into the office once a week on a Thursday afternoon to tell his colleagues about the new mandate he secured for the firm isn't going to get shit from anyone. On the other hand - above a certain level, no sales = good night, sweet prince.
Juniors are judged by long hours and making sure their commas are perfect (in documents rarely read by clients) because there is nothing else to judge them on.
Think about it...Musk has been growing increasingly erratic lately. It's a hot company, they seem to be hitting their numbers and yet people are bailing under rather circumstances (<1 month after joining a hot startup?)
Something is obviously putting incredible levels of psychological pressure on them.
hmmm...need to check whether I can short this tomorrow.
I get the urge to block these news sources every time I see a tesla article pop up in my feed, but I have a personal policy of not blocking any news source, I just refuse to click them any longer despite the strong urge I get after reading the headline. It's one mass overreaction. I imagine Tesla pushing into profit with time to spare in the near future and is anyone going to call out these authors, publishers?
I wish there was a way to see who is paying these authors and who is donating to these publishers. If we could follow the money it may reveal some motivation beyond the click bait headlines, or maybe not.
This is Bloomberg news... a generally respected reporting source. The owner is Michael Bloomberg if you are curious.. but it's not just Bloomberg that is bearish on Tesla it's any news reporting source which has looked at Tesla financials...
At least once a week the Financial Times has been roasting Tesla/Elon too.
This is not a conspiracy. It's basic math and accounting.
The embedded assumption is that current demand is sustainable, rather than simply a reduction in a multi-year fanatic backlog.
Embedded inside that assumption are a lot of assumptions about ramps in production with consistent quality and finish, and lack of EV competition.
I personally disagree that Tesla can maintain production and quality at these levels without needing more financing, but the verdict is definitely not in yet.
> I imagine Tesla pushing into profit with time to spare
Is your imagination based on any facts, or just your feelings?
From my point of view, they are not currently profitable and becoming profitable is not in the near future. Are there any independent analysts that are predicting Telsa profitability on the same timeline as Tesla themselves?
So in your comment further up, you're implying that Bloomberg et al have some kind of ulterior motives for writing articles about Tesla's shortcomings and are decrying them for it, but you're also willing to take full stock in information directly from Tesla without questioning it?
You might be right that these authors have some kind of bias against Tesla, but it is a 100% certainty that Tesla has a bias for itself. It seems hypocritical to distrust independent news organizations but then blindly trust Tesla.
If you're looking at "strictly manufacturing numbers", then you're only looking at part of the picture, conveniently, the part that Tesla wants you to look at.
News organizations provide extra contextual information that reveals that "strictly manufacturing numbers" aren't representative of the company's performance. This is why they are valued.
But that's getting away from the point: you're distrustful of news organizations for possibly having motives, and yet you're trustful of Tesla even though they definitely have motives. It doesn't make sense.
They may have motives but there are laws in place that prevent them from falsifying the data required to come to an intelligent conclusion of whether Tesla will pay off their debt or not so the data better not be false.
As for the news organizations, there is a possibility they have motives and the way many of the articles are composed does not help the case that they do not have motives, whether that be get the most clicks or push down another organization. I believe they have laws in place as well to protect readers from this sort of behavior, but I'm not sure.
Both types of organizations have been known to break the law though so we're left wondering what the future will hold. It will be fun to look back in the months ahead and see which theory was correct.
Both types of organizations have been known to break the law though so we're left wondering what the future will hold. It will be fun to look back in the months ahead and see which theory was correct.
If you're going to make a broadly defamatory claim about an entire industry, you need to back it up with evidence.
