Elon Musk, the CEO of Tesla, The Boring Company, and SpaceX, recently made headlines after posting a tweet about taking Tesla private. Initially, investors wondered whether his account had been hacked. However, Elon Musk reiterated the notion on Tesla’s official website as well as in an email to employees.
Public trading often frustrates Elon Musk, particularly investors who “short” the company, betting that its stock value will decline. However, the billionaire’s statement led to a fallout, including causing Tesla to be a potential target for scrutiny by the Securities and Exchange Commission (SEC).
Many investors chose to move away from Tesla, causing a fairly large sell-off and sending share prices tumbling. Additionally, many have started to wonder whether Elon Musk should leave Tesla if the company is to recover.
Tesla’s Battle for Profitability
In a recent interview, Elon Musk outlined his struggles with turning Tesla into a profitable business. While the company is certainly innovative, the CEO admitted that he had had 120-hour work weeks and, at times, needs Ambien to sleep.
One issue is the production of the Tesla Model 3. Frequent delays and missed production goals harmed the company’s reputation. Ultimately, this impacts investor sentiment, hurting Tesla’s value.
Elon Musk owns approximately 20 percent of Tesla, so his stake is substantial. However, he does not have the ability to take the company private alone. Instead, he would need majority shareholder approval.
While Elon Must may see the option of going private as potentially beneficial, shareholders may not feel the same way. This could cause a rift, leading to additional struggles for the company.
Tesla’s stock is down 1 percent this year. Whether it will continue to fall is unknown, as investor sentiment can shift quickly.
Should Elon Musk Leave Tesla?
Ultimately, it’s hard to say whether Tesla would be better off without Elon Musk. Board members have reportedly expressed concern over Elon Musk’s use of Ambien, but have not made an outward attempt to out the CEO.
In early August, Azealia Banks also made claims on social media that Elon Musk was using LSD, an illegal, psychedelic substance known for its mind-altering effects. The post was later deleted, and it is unknown whether her claims were accurate.
CNBC host Jim Cramer has openly stated that he believes Elon Musk should take medical leave from the company.
Joe Nocera, an opinion columnist on Bloomberg, has even suggested that Elon Musk should find another CEO for Tesla.
However, Elon Musk frequently battles back against calls that he should leave the company. Whether that position is best for Tesla isn’t easy to discern, partially because it isn’t clear who would take Elon Musk’s place as CEO.
Even if the billionaire left Tesla, any incoming CEO would need to have a strong vision and plan for the company. Since there is no indication that Elon Musk intends to abandon his association with the company, one can only speculate whether the Tesla would fare better without him.
Do you think Elon Musk should leave Tesla? Tell us your thoughts in the comments below.
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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