
Tesla Accounting Chief, HR Head Resign on the Same Day; Stock Plunges - dsr12
https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-dave-morton-resigns-jlrzkn5k
======
chollida1
And their Chief People Officer, is not coming back from her leave.

From the outside it looks like Telsa is about going to go into a tough winter
like moment.

They are almost losing by winning. They are at capacity in their Fremont
factory but still not making a profit.

They need to start designing and building out manufacturing facilities for
their next car and the help bolster Model X manufacturing.

Stop and think for a second that Tesla is one earthquake away from no longer
being a company.

\- They are cash flow negative,

\- they have about a year of cash runway left( optimistically)

You can't just collect insurance money and build a new factory like you can
with a house, this is a many year project.

Tesla can't afford to not build cars for multiple years.

Forget the SEC investigation hanging over their head. From what I read, they
are likely to get a large fine and a strong talking to.

And the most worrying thing for them is that their next car will compete head
on with Mercedes, BMW, Audi, and GM. That will be the first time they've had
to compete head on with a competitor.

~~~
this_user
> they have about a year of cash runway left( optimistically)

Much less than that actually. At their current burn rate they won't even be
making it to the end of this year without either selling enough M3 to generate
some real cash, or by raising some new money from the market. Also, they have
a lot of debt come due next year (and even more over the following years)
while yields are up to over 8%.

However, M3 production numbers are actually looking good now, and they are
hitting their targets for the first time. And their cash burn for Q2 came in
lower than expected after some cost cutting. So they might be able to turn the
corner just in time. Musk has repeatedly stated that the company will not need
to raise new money, but had also done that before some previous financing
rounds, so the market does not put that much faith in his words at this point.

It all hinges on the M3 now. Can they get production (and sales) numbers to
where they need to be in order to become cash flow positive?

~~~
pesmhey
Hey, honestly though...the name ‘M3’ de facto belongs to BMW. You know that.
Everyone else who’s commenting on a thread about luxury cars knows that. The
fact that you’re using that name to describe some upstart car company’s new
model, it’s...it’s weird. Like, just call it the model fucking 3.

God I can’t wait for the Tesla fanboydom to just be put in its place. Cool
concept, not cool people attached to it. M3, lol.

~~~
beamatronic
Who refers to a Tesla Model 3 as a “M3”?

“M3” has and will always refer to a BMW.

------
fencepost
As someone who's not obsessively following Tesla, I'm a bit jaded by these.
I'm sure there are problems, but what feels like massive PR efforts by the
"shorts" has effectively poisoned the well for negative news.

As a casual observer I can't tell what's actual bad news and what's well-
orchestrated market-manipulation "OMG WE'RE ALL GONNA DIE" by people trying to
drop the price, and I don't actually care enough about the company to put in
the effort to find out.

Kind of depressing, really.

~~~
matwood
> I'm sure there are problems, but what feels like massive PR efforts by the
> "shorts" has effectively poisoned the well for negative news.

What kind of PR effort do you need when every CFO you hire keeps leaving?
Think about it. The person in the company who completely knows the financials
stays for a month and bounces? Why? Could it be that the financials are so bad
they are unfixable? Could it be that that person is being pushed to stretch
things a bit here and there to make them look better?

~~~
dnomad
> What kind of PR effort do you need when every CFO you hire keeps leaving?

It's really gotten to a point where all the Musk-haters now believe their own
bullshit. This post (and many others in HN's bi-weekly anti-Musk thread) is a
classic example. Tesla had had a grand total of two CFOs since Musk took over.

> Could it be that that person is being pushed to stretch things a bit here
> and there to make them look better?

Could it be that that person is an alien sent from Venus to stop Musk from
returning to Mars?

See, it's easy to ask stupidly leading questions and spout completely baseless
speculation. What's more difficult is actually examining the facts and drawing
a rational conclusion.

~~~
matwood
>See, it's easy to ask stupidly leading questions and spout completely
baseless speculation. What's more difficult is actually examining the facts
and drawing a rational conclusion.

 _In the first quarter of this year, the company lost Morton’s predecessor,
Eric Branderiz, and Susan Repo, who was treasurer and vice president of
finance. CFO Deepak Ahuja retired in 2015, only to return in 2017 after his
successor, Jason Wheeler, quit after just 15 months._

A rotating door of financial executives screams financial problems. Please
tell me what rational conclusion I'm supposed to draw?

~~~
dnomad
Yeah that's not a rotating door of anything. Both those executives were with
the company for 2-5 _years_ before they decided to leave. Wheeler was almost
certainly fired because Musk wanted Ahuja back. Consider that the announcement
of Ahuja's return occured one day after Wheeler's announcement. Sorry, this
entire narrative you have invested in of executives running for the hills just
has no relation to reality.

~~~
matwood
And the head HR person.

[https://www.cnbc.com/2018/09/07/another-tesla-executive-
leav...](https://www.cnbc.com/2018/09/07/another-tesla-executive-leaves-this-
time-its-hr-boss-gaby-toledano-report.html)

> Sorry, this entire narrative you have invested in of executives running for
> the hills just has no relation to reality.

TSLA supporters thinking everything is fine are the ones that have no relation
to reality.

~~~
9935c101ab17a66
yah but that's not what you said.

damn, I think Tesla is an incredibly dysfunctional company and has a lot of
problems, but you're literally making things up. admit you were wrong and
you're initial statement was completely inaccurate and move on.

~~~
matwood
From the original article:

 _Tesla has long struggled with high turnover involving its senior executives,
and its finance team in particular has gone through a period of significant
tumult. In the first quarter of this year, the company lost Morton’s
predecessor, Eric Branderiz, and Susan Repo, who was treasurer and vice
president of finance. CFO Deepak Ahuja retired in 2015, only to return last
year when his successor, Jason Wheeler, quit after just 15 months._

And I said:

> A rotating door of _financial executives_ screams financial problems.

3 (4 if you count the return of Ahuja to fill in) CFO/CAOs in the last 3
years.

\- Ahuja \- Wheeler \- Ajuha \- Branderiz \- Morton

This doesn't count the VPs that have come and gone or other executives.

 _More than 50 vice presidents or higher have left the company in the past two
years. Mr. Musk has said he sees executive turnover as being in line with that
of other large companies and has announced plans for a reorganization aimed at
flattening the layers of managers._ [1]

Please tell me where I'm making things up.

[1] [https://www.wsj.com/articles/elon-musk-appears-to-smoke-
mari...](https://www.wsj.com/articles/elon-musk-appears-to-smoke-marijuana-on-
camera-in-lengthy-interview-1536318688)

------
Nokinside
If Tesla needs more money, investors will use that as a leverage to get the
Elon Musk problem addressed.

It would be good for everyone if there is intervention that corrects the
problem and Musk could continue. Investors can demand to have someone who can
veto his craziest decisions and publicity or they can force him out. Musk has
structured the board so that nobody has power over him. He must know that if
asks more money that changes.

Musk seems to be highly functioning bipolar (he thinks so himself). It's
probably mild form of bipolar disorder called cyclothymic disorder or
something similar. People with cyclothymia are at increased risk of developing
full-blown bipolar disorder over time.

The problem is that that his mental issues may get out of hand during
stressful situations. Musk has been showing signs of slipping from hypomania
to full mania for the last year: little sleep, endless energy, lowered
inhibitions, erratic quick decisions and unnecessary confrontations. If he
publicly calls people he has never met pedophiles, I just can't imagine how
bad the situation is with the people who have to deal with him every day.

Musk has already achieved so much. It would be shame if it all ends in
tragedy.

~~~
HeadsUpHigh
>If Tesla needs more money, investors will use that as a leverage to get the
Elon Musk problem addressed.

Sounds you are lost into your own bubble. Every vote for removing Musk has
failed completely in the past.

~~~
bdcravens
Those votes have failed due to how the company's voting structure is set up.
It takes about 90% of the vote outside of Musk and insiders to oust him.

~~~
HeadsUpHigh
They barely hit single-digits though.

------
smpetrey
Here's the none-AMP Bloomberg article:

[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)

------
maxxxxx
I just watched a part of the Joe Rogan podcast with Musk and I have to say he
looks very unhealthy. Maybe I am wrong but to me he looks like he is drinking
a lot or on some other drugs.

I can imagine working with a CEO who is pushing himself way other the limit is
a pretty unpleasant experience.

~~~
dgritsko
Didn't he actually smoke weed live as part of that broadcast?

~~~
randlet
He had a single puff and did not appear to inhale (his body language made it
look like he was a very inexperienced smoker). He said he'd tried it before
but wasn't a big fan (a pretty common experience).

edit: people are going to need to get used to the fact that weed is going to
become as normalized as alcohol (which is a harder drug than weed).

~~~
i_am_nomad
Sigh. I suspect you're right about the normalization, I just absolutely hate
the smell of it. I grew up on the East Coast, where cigarette smoking was
commonplace, and I always found it revolting. Here in the Bay Area, I've had a
few years to enjoy the relative scarcity of tobacco smoke, and now suddenly
cannabis is out in the open. Seems like there's no escape from second-hand
smoke.

~~~
randlet
Smoking it in public is obnoxious I agree. Hopefully people choose to eat or
vapourize it rather than burn it.

------
sophistication
I'm not losing optimism because of this. Musk fits right into the current
political & cultural trajectory and the Tesla brand is sleek & timeless. The
media is framing Musk's flaws (Twitter insults, weed & booze) as a bad thing,
but outside of the media, people do not care about such things nearly as much.
It just requires a few years of optimization and the cars are going to be en
par with established brands.

~~~
cecja
Talk about gaslighting yourself. If you are not recoginizing that something
fishy is going on at tesla you are not reading the same articles as the rest
of us.

~~~
rcMgD2BwE72F
What's fishy? I've been following Tesla since 2010 and the main changes since
then isn't what appears to be fishy but what the media are making of it.

Do you realize that Tesla sold more cars in the US that Mercedes and BMW this
summer? How many media reported that?

Do you know that the most trusted car analysts who tear-down the car said it's
expected to be the most profitable car produced in high volume?

Do you know that all data analyses about turnover in top positions at Tesla
indicated that they are average? How many reports about such moves (at legacy
automakers) make headlines?

They've only increased their coverage of the company and try their best to
make every thing more clickbait. It's worked great so far, for sure.

~~~
Nokinside
>Tesla sold more cars in the US that Mercedes and BMW this summer? How many
media reported that?

Please, that was one month of backlog deliveries (July, 16,000 deliveries) and
only in the US. 16, Nobody expects that Tesla manufactures 16,000 Model 3's
per month.

Meanwhile Mercedes sells 30,000 C-Class Saloon and Estate models per month
globally. In the US Mercedes and BMW each keep delivering 12,000 or so
vehicles per month in the same category as Tesla models are.

~~~
rcMgD2BwE72F
You're right, because August is the month during which Tesla surpassed both
BMW and Mercedes. We're in September so how can there be more than a month?
Both BMW and Mercedes US car sales are falling hard:
[https://www.businesswire.com/news/home/20180904005710/en/Mer...](https://www.businesswire.com/news/home/20180904005710/en/Mercedes-
Benz-USA-Reports-August-Sales-20339-Units),
[https://www.businesswire.com/news/home/20180904005748/en/BMW...](https://www.businesswire.com/news/home/20180904005748/en/BMW-
Group-U.S.-Reports-August-2018-Sales)

~~~
perl4ever
Is there something going on with tariffs?

It was well publicized that the President doesn't want people buying Mercedes.

------
debacle
Non-amp URL: [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)

Better formatting, no hideously pixelated photos.

~~~
gwbas1c
And the next article, when I kept scrolling, showed Musk smoking a joint and
then holding a flamethrower!

------
3pt14159
It is worrying, but I don't know if I'd really call that a stock plunge.

------
Filligree
A while ago I considered reserving a model 3, but I eventually decided against
it. Feel like I dodged a bullet, there.

There was a time where Tesla had a genuine advantage over the incumbents, but
it never was enough of an advantage to overcome their lack of experience.
That's only obvious in retrospect, I suppose.

~~~
rcMgD2BwE72F
Can you cite one source that indicates that Model 3 owners are somehow
dissatisfied? All reviews (by the general public and by journalists) say the
car performance, quality and experience is excellent and above Mercedes /
BMW's.

Have you driven one?

~~~
timellis-smith
[https://www.businessinsider.com/survey-uk-drivers-say-
tesla-...](https://www.businessinsider.com/survey-uk-drivers-say-tesla-model-
s-most-unreliable-car-2018-9?r=UK&IR=T)

------
sumedh
I think Elon Musk is a genius and I don't use that word lightly. I think he's
also one of the boldest men that ever came down the pike. Put me down as
saying I've always been afraid of the guy whose IQ is 190 and he thinks it's
250. I like to think there’s a little of that risk with Elon - Charlie Munger
(in 2014)

------
ajmurmann
I think it's time for Elon to step away from Tesla. He is an incredible
visionary and that's what made Tesla possible and revolutionized the car
industry. That work is done now. Everyone is making electric cars now. There
is no need for Elon to innovate at Tesla anymore. I might even go so far and
say that Tesla had moved the entire industry so much that there isn't even
much need for Tesla itself.

I think it's best for everyone if Elon focused on SpaceX, the Boring Company
and his AI endeavors. Tesla sticks out from this list because mission is
accomplished.

~~~
itgoon
I tend to agree. He's been fantastic at getting the impossible to happen, but
he's not as good at just running things.

There was a bit in time when he offered to help Flint, MI with their water. It
turns out they don't need the help.

However, if he were to turn his fantastic energy towards helping under-served
communities, I think he'd find that there's plenty to do, and very satisfying.

~~~
ajmurmann
I have the suspicion as well that he isn't great at running a steady business.
My point is really about his amazing visionary qualities being more useful
elsewhere. Even if he was great at running things too, it's radical innovation
where he is a once in a century person.

Edit: it would be a shame to waste that amazing innovation talent at what's
now a close to regular car company (relative to his other ventures)

------
acd
Tesla may be going bankrupt the Altman-z score of guru focus indicates that.
Hopefully the source code will be open source.
[https://www.gurufocus.com/stock/TSLA](https://www.gurufocus.com/stock/TSLA)

------
jacknews
So the headline is that the CFO is resigning, yet there's a huge picture of
the photogenic HR chief(?), who, as a side-story, is 'not returning'.

I feel manipulated. Also that this publication should be doing a bit more
investigation and a bit less pontificating.

~~~
LaGrange
It's much less huge on the non-amp site:
[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) — I got a hunch that's
what I'm seeing b/c that image was incredibly blurry. I have no idea why
people link to the googlified versions of websites, they're often barely
readable.

------
ricksanch88
I love how someone from Jeffries is concerned with Tesla's use of marijuana. I
know three analysts that work at Jeffries and they all microdose and/or use
cocaine. It's par for the course.

------
empath75
IMO, they should fire musk, slow down their blue-sky research projects, rip
autopilot out of the cars, and just build "boring" luxury electric cars with
huge profit margins and rake in cash.

~~~
spiderfarmer
I don't think they should fire him, but he should most definately do the un-
american thing: work a sane amount of hours and go on vacation every now and
then.

~~~
dasil003
I don't care how much he works, but he's gotta do something about his thin
skin and incompetence with the media.

~~~
meowface
He just needs to stop doing PR.

~~~
enraged_camel
On the contrary, the overwhelming majority of his media appearances have been
widely popular. But something seems to have snapped in him recently, perhaps
culminating with calling that cave rescuer a pedophile. The dude has serious
problems that are probably exacerbated by stress and lack of sleep. He needs
to take a break before something bad happens.

------
kerng
The revolution devours it's own. What Tesla started is amazing, years ahead of
competition initially, but there will be a very tough future ahead as electric
cars become more and more the norm.

------
claydavisss
"Stock Plunges"?

If anything, TSLA seems to continue to ride high with only small relative
deviations with news that would gut any other stock.

Not to say I am bullish on TSLA...quite the opposite. TSLA will inevitably
crater but it is going to take most of the NASDAQ with it and probably wipe
out the mobility 2.0 market segment and the EV and nascent AV markets.

Silicon Valley is way overdue for a serious garbage collection cycle....TSLA
is going to trigger it eventually. Its not all bad: a big reset in SV would
benefit the big players like Apple and Google who will suddenly have a much
deeper and cheaper talent pool to access.

------
RobertSmith
If you visit Tesla's management's page you can see only 3 names; Elon Musk,
CFO Deepak Ahuja and CTO JB Straubel. No exec stays for a long period in
Tesla. Who is going to resign next? CFO or CTO
[https://news.alphastreet.com/tesla-motors-cao-chief-
accounti...](https://news.alphastreet.com/tesla-motors-cao-chief-accounting-
officer-dave-david-morton-resigns/)

------
onepremise
Seems like much of this is closely related to the 'going private' statements.
I'm curious if Elon had it out for one of the many short selling firms
exploiting TSLA stock, Citron Research, etc... There's more at work here than
just Elon being overzealous with corporate ambitions. There are groups of
people, venture capitalists, and banks hell bent on weaponizing margin trading
to manipulate markets.

