
Tesla's Finance Team Is Losing Another Top Executive - minimaxir
https://www.bloomberg.com/news/articles/2018-09-12/tesla-s-finance-team-is-said-to-be-losing-another-top-executive
======
AmVess
49 top level execs have left this year. After a while, patterns begin to form
that make us question their underlying causes.

~~~
sunstone
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.

~~~
CydeWeys
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.

~~~
linuxftw
> Why are they so uncompetitive?

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?

------
scotchio
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.

[1] [https://nordic.businessinsider.com/tesla-stock-down-musk-
fil...](https://nordic.businessinsider.com/tesla-stock-down-musk-filmed-
smoking-pot-executives-leave-2018-9)

[2] [https://www.bloomberg.com/news/articles/2018-09-07/tesla-
chi...](https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-
accounting-officer-leaves-citing-level-of-scrutiny)

[3] [https://www.tesla.com/en_GB/blog/company-
update](https://www.tesla.com/en_GB/blog/company-update)

~~~
bduerst
>Just SHOW ME THE NUMBERS

Tesla is:

\- 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.

~~~
Reedx
> 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.

Not to mention SpaceX.

~~~
bduerst
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.

------
mvpu
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.

------
ForHackernews
What happens to all the unserviceable Tesla vehicles if the OEM goes bankrupt?
Is your car just bricked then? Do owners have any recourse?

~~~
freerobby
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.

~~~
karpodiem
Absolutely false. No one is going to financially assume Tesla's $10 billion
debt with operations that yield huge negative free cash flow.

It's going to Chapter 7 - Liquidation.

~~~
bduerst
Yep - warranties are pretty much voided if the manufacturer goes bankrupt.
Unlike bond holders, warranty holders are last in line for being remunerated.

------
liftbigweights
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".

~~~
linuxftw
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.

------
frgtpsswrdlame
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.

~~~
devoply
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.

~~~
smnrchrds
It always amazes me how some people dismiss and underestimate every profession
except their own, but fail to see the irony and hypocrisy in that.

~~~
p2detar
But isn't that right though? Tesla build cars, not fintech products. What
irreplaceable knowledge are they losing in this particular case?

~~~
tomjakubowski
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](https://en.wikipedia.org/wiki/Work-to-rule)

------
Havoc
Massive scandal incoming.

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.

------
radium3d
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.

~~~
dforrestwilson
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.

[https://ftalphaville.ft.com/2018/09/07/1536327657000/If-
it-h...](https://ftalphaville.ft.com/2018/09/07/1536327657000/If-it-has-to-be-
said-out-loud-----Tesla-edition-/)

~~~
radium3d
The manufacturing has been accelerating consistently, this is why I'm
skeptical of the outside news articles which tend to ignore the progress.

~~~
dforrestwilson
Bloomberg is very positive from a production standpoint.... but each car
produced loses money no?

[https://www.bloomberg.com/graphics/2018-tesla-
tracker/](https://www.bloomberg.com/graphics/2018-tesla-tracker/)

~~~
xanderjanz
No.

~~~
dforrestwilson
OK can you be more helpful and maybe back that assertion up with
evidence/data?

Here's some for you: [https://www.quora.com/Is-Tesla-losing-money-on-each-
Model-3-...](https://www.quora.com/Is-Tesla-losing-money-on-each-Model-3-they-
sell#)

~~~
xanderjanz
I guess by definition, as long as they lose money, they lose money on each
Model 3.

But really what you're implying is, _when Fremont is a closer to full
produciton_ , each Model 3 will net a loss. Best engineers say no.
[https://www.cnet.com/roadshow/news/2018-tesla-
model-3-munro-...](https://www.cnet.com/roadshow/news/2018-tesla-
model-3-munro-associates-profitable/)

Even Tesla's public financials show they lost _more_ money, when they made
_less_ model 3s.

~~~
dforrestwilson
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.

~~~
xanderjanz
You don't care about profitability anymore?

Now you want to talk about demand? OK.

\- Tesla is mentioned in multiple current top rap songs.

\- Elon has the most viewed episode of the most viewed podcast.

\- Tesla is working on a rocket powered car.

\- Teslas are featured in major TV shows and movies.

\- $45k auto loan is within range of your average middle class budget.

You think that wont translate to sales? We'll see.

~~~
dforrestwilson
I think a lot of promises (and outright lies) have been stated.

[https://www.cnbc.com/2018/09/18/tesla-stock-drops-after-
comp...](https://www.cnbc.com/2018/09/18/tesla-stock-drops-after-company-
reportedly-to-face-us-criminal-probe-over-musk-statements.html)

