Tesla lost nearly $8 billion in shareholder value this week and its board should be ashamed

Over the last five days, Tesla shareholders watched the value of their stock decline by roughly 16 percent and saw nearly $8 billion in value erased, as the company’s celebrity chief executive, Elon Musk, had what amounts to a very public breakdown. However, Musk is not the only person responsible for the collapse of Tesla’s […]

Over the last five days, Tesla shareholders watched the value of their stock decline by roughly 16 percent and saw nearly $8 billion in value erased, as the company’s celebrity chief executive, Elon Musk, had what amounts to a very public breakdown.

However, Musk is not the only person responsible for the collapse of Tesla’s stock price. As The New York Times article which precipitated the latest slide in Tesla’s value on the public markets makes clear, the company’s board is also to blame.

For months, Musk has been showing signs of strain (generously speaking), and has been accused of making questionable decisions to drive growth and stifle criticism or dissent at the revolutionary electric vehicle company he founded.

During that time, as Shira Ovide notes in her piece from Bloomberg, Tesla’s board (primarily composed of Musk’s friends, relatives and initial investors) took no public steps to control or manage the situation.

Privately and on background the board (or certain members) expressed concern over Musk’s recent behavior, drug use (both medicinal and recreational) and Twitter habits.

Those concerns should have been aired at the board level and the company’s directors should have exercised their ability to manage the mercurial Musk as his public actions became increasingly unmoored.

Something could have happened after the disastrous earnings call with analysts. It could have happened around the time of the strange active shooter allegations that were made against a Tesla whistleblower. It could have happened after Musk called a diver involved in the rescue of trapped and starving children a “pedo.”

At any of those moments the board could have stepped in and demanded that Musk face the consequences for actions that cost his company billions of dollars. They did not, and now Tesla’s position is more precarious than ever.

The Securities and Exchange Commission is investigating Musk for his public statements around privatization plans for Tesla that may or may not have been real.

It’s another distraction for the company’s chief executive at a time when he is already under tremendous pressure to meet production targets for the company’s troubled Model 3 rollout (even as it begins to hit its targets).

The problem is that Musk’s cult of personality is so intertwined with Tesla’s corporate identity, there’s a fear that as Musk goes so goes Tesla. That’s no way to run a business, and it’s no way to ensure long-term value for shareholders (either as a public or private company).

Ultimately the board at Tesla needs to step in and take a more active role in overseeing the company, before the next decision they find themselves confronted with is the company’s liquidation.

Tesla shares tumble in early trading after another Elon Musk-powered PR blunder

Elon Musk, the embattled chief executive of electric automaker and sustainable energy company Tesla, tried to “set the record straight” about his recent behavior in an hour-long exclusive interview with The New York Times. Instead, it only served to further underscore how out-of-touch the billionaire chief executive seems from the ongoing operations at his company. […]

Elon Musk, the embattled chief executive of electric automaker and sustainable energy company Tesla, tried to “set the record straight” about his recent behavior in an hour-long exclusive interview with The New York Times. Instead, it only served to further underscore how out-of-touch the billionaire chief executive seems from the ongoing operations at his company. The fallout has already begun, with shares falling in early trading.

His erratic behavior could cost investors billions and potentially destroy a company that has, in fact, revolutionized the automotive industry in America.

In the wide-ranging interview, Musk acknowledged the personal and physical toll running Tesla was taking on him and tried to explain away his recent behavior.

The latest drama began with a simple midday tweet last week indicating that Musk had secured funding to take Tesla private at a price of $420 per share.

The number (which is both within the range of a 20 percent premium of Tesla shares at the time, and a code with special significance for people who smoke marijuana), the timing of the announcement and the medium on which it was issued all raised eyebrows.

From there, it has pretty much been all downhill for Musk and Tesla as the company’s executive bounced from one public relations blunder to another.

There are the allegations of illegal drug use, which Musk feebly addresses in his interview, saying:

“I was not on weed, to be clear,” he said.

“Weed is not helpful for productivity. There’s a reason for the word ‘stoned.’ You just sit there like a stone on weed.”

Reporting from the Times also contradicts another assertion that Musk made in the interview — which is that Tesla’s board is not seeking someone to take the reins as a chief operating officer at the company. Something which would indubitably help take off of Musk’s shoulders some of the pressures of running the business.

The chief executive acknowledged the physical toll that managing Tesla has taken on him, but said that he does not regret any of his recent actions.

Given that the Securities and Exchange Commission is investigating the circumstances around the tweet, that may be another position that is subject to revision.

It’s been a long, hot summer for Tesla’s operations, and Musk has only exacerbated problems for the company with his very public complaints about short sellers, whistle-blowers, reporters, analysts and others who have openly questioned the company’s viability.

There are very real concerns about production of the company’s newest model, alongside claims from whistleblowers that the pressures of meeting deadlines for the new car have led to cutting corners on safety.

Throughout all of it, Tesla’s board has remained firmly committed to protecting Musk and preserving his role as chief executive officer.

As the board said in a statement it released to the Times:

There have been many false and irresponsible rumors in the press about the discussions of the Tesla board. We would like to make clear that Elon’s commitment and dedication to Tesla is obvious. Over the past 15 years, Elon’s leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.

Perhaps the best thing the company’s caretakers can do now is ensure that Musk gets some help (in the C-suite — and potentially outside of it).

It seems from the interview that Musk is asking for the same thing.

“[If] you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now,” Musk told the Times.

Update: New whistleblower claims against Tesla allege drug trafficking, theft and phone hacking coverup

This post has been updated with a comment from Tesla. Employees at Tesla’s Nevada gigafactory were allegedly involved in a massive drug ring, stole $37 million worth of precious metals and equipment and illegally spied on former employees at the behest of chief executive Elon Musk, according to a new whistleblower complaint filed against the company.

This post has been updated with a comment from Tesla

Employees at Tesla’s Nevada gigafactory were allegedly involved in a massive drug ring, stole $37 million worth of precious metals and equipment and illegally spied on former employees at the behest of chief executive Elon Musk, according to a new whistleblower complaint filed against the company.

First reported by Jalopnik, the complaint is only the latest in a string of damaging news stories that have erased millions in value for Tesla shareholders and could cast the future of the company’s celebrity chief executive, Elon Musk, into doubt.

It’s also the second whistleblower claim filed against the company this summer.

This time the whistleblower is Karl Hansen, a former member of Tesla’s internal security department and investigations division.

The complaint from Hansen, a former special agent, member of the US Army’s Criminal Investigation Command, and senior investigator for the Federal Maritime Commission, reads like a weird mashup of Sons of Anarchy, Silicon Valley and Scandal.

Hansen claims that Tesla failed to disclose a recent internal investigation the company made into a tip it received from the U.S. Drug Enforcement Agency and Storey County Sheriff’s Office that several of its gigafactory employees were part of “a narcotics trafficking ring involving the sale of significant quantities of cocaine and possibly crystal methamphetamine at the Gigafactory on behalf of a Mexican drug cartel from Sonora Mexico.”

According to a statement from Hansen’s legal counsel (Meissner Associates — the firm also representing Tesla’s other whistleblower, Martin Tripp), Hansen claims that he corroborated connections between the named employees and alleged members of the Mexican drug cartel, but Tesla refused to investigate the matter further and said it would hire “outside vendors” to follow up. Hansen says the company never did.

For its part, the Drug Enforcement Agency issued a statement to BuzzFeed saying that it would not inform any “non-law enforcement entities” of ongoing or pending investigations.

Drug smuggling may not be the wildest allegation in Hansen’s complaint. According to the summary from Meissner, Hansen also claims that Tesla installed eavesdropping and wiretapping equipment at its facilities and was illegally listening to conversations and scanning messages from Tripp at the behest of the company’s chief executive, Elon Musk .

Here’s the relevant section from the complaint:

According to Mr. Hansen, following Tripp’s departure from Tesla, Tesla went so far as to install specialized router equipment within its Nevada Gigafactory designed to capture employee cell phone communications and/or retrieve employee cell phone data. The Meissner firm recently released police reports relating to this past June’s GigaGate incident indicating that Tesla security personnel may have unlawfully accessed Mr. Tripp’s cell phone long after he was fired by Tesla. Mr. Hansen states that he was told these tactics were specifically authorized by CEO Elon Musk and were implemented by members of Tesla’s internal investigations/security/IT units.”

Finally, Hansen has said that the company never disclosed the theft of $37 million in precious metals and materials used in making the company’s batteries.

The release today follows disclosures from Tripp, the original gigafactory whistleblower, of damaged Tesla batteries that allegedly made their way into actual vehicles.

These disclosures, coupled with allegations of erratic behavior from Tesla chief executive Elon Musk, and the (apparently fictitious) nebulous plans to take the company private, have caused Tesla’s share price to slide over roughly $40 over the last two weeks, erasing nearly $6 billion in value from the company.

The full text of Meissner’s summary of the complaints their client is making is below. Mr. Meissner said that Hansen would not be conducting interviews. The Storey County Sheriff’s Department said they would issue a statement on the Meissner report this evening.

“Mr. Hansen’s allegations were taken very seriously when he brought them forward. Some of his claims are outright false. Others could not be corroborated, so we suggested additional investigative steps to try and validate the information he had received second-hand from a single anonymous source,” a spokesperson for Tesla wrote in an email. “Because we wanted to be sure we got this right, we made numerous attempts to engage further with Mr. Hansen to understand more about what he was claiming and the work that he did in reaching his conclusions. He rejected each of those attempts, and to date has refused to speak with the company further. It seems strange that Mr. Hansen would claim that he is concerned about something happening within the company, but then refuse to engage with the company to discuss the information that he believes he has.”

Client Revised FinaL to Be Released UPDATED by Jonathan Shieber on Scribd

Update: New whistleblower claims against Tesla allege drug trafficking, theft and phone hacking coverup

This post has been updated with a comment from Tesla. Employees at Tesla’s Nevada gigafactory were allegedly involved in a massive drug ring, stole $37 million worth of precious metals and equipment and illegally spied on former employees at the behest of chief executive Elon Musk, according to a new whistleblower complaint filed against the company.

This post has been updated with a comment from Tesla

Employees at Tesla’s Nevada gigafactory were allegedly involved in a massive drug ring, stole $37 million worth of precious metals and equipment and illegally spied on former employees at the behest of chief executive Elon Musk, according to a new whistleblower complaint filed against the company.

First reported by Jalopnik, the complaint is only the latest in a string of damaging news stories that have erased millions in value for Tesla shareholders and could cast the future of the company’s celebrity chief executive, Elon Musk, into doubt.

It’s also the second whistleblower claim filed against the company this summer.

This time the whistleblower is Karl Hansen, a former member of Tesla’s internal security department and investigations division.

The complaint from Hansen, a former special agent, member of the US Army’s Criminal Investigation Command, and senior investigator for the Federal Maritime Commission, reads like a weird mashup of Sons of Anarchy, Silicon Valley and Scandal.

Hansen claims that Tesla failed to disclose a recent internal investigation the company made into a tip it received from the U.S. Drug Enforcement Agency and Storey County Sheriff’s Office that several of its gigafactory employees were part of “a narcotics trafficking ring involving the sale of significant quantities of cocaine and possibly crystal methamphetamine at the Gigafactory on behalf of a Mexican drug cartel from Sonora Mexico.”

According to a statement from Hansen’s legal counsel (Meissner Associates — the firm also representing Tesla’s other whistleblower, Martin Tripp), Hansen claims that he corroborated connections between the named employees and alleged members of the Mexican drug cartel, but Tesla refused to investigate the matter further and said it would hire “outside vendors” to follow up. Hansen says the company never did.

For its part, the Drug Enforcement Agency issued a statement to BuzzFeed saying that it would not inform any “non-law enforcement entities” of ongoing or pending investigations.

Drug smuggling may not be the wildest allegation in Hansen’s complaint. According to the summary from Meissner, Hansen also claims that Tesla installed eavesdropping and wiretapping equipment at its facilities and was illegally listening to conversations and scanning messages from Tripp at the behest of the company’s chief executive, Elon Musk .

Here’s the relevant section from the complaint:

According to Mr. Hansen, following Tripp’s departure from Tesla, Tesla went so far as to install specialized router equipment within its Nevada Gigafactory designed to capture employee cell phone communications and/or retrieve employee cell phone data. The Meissner firm recently released police reports relating to this past June’s GigaGate incident indicating that Tesla security personnel may have unlawfully accessed Mr. Tripp’s cell phone long after he was fired by Tesla. Mr. Hansen states that he was told these tactics were specifically authorized by CEO Elon Musk and were implemented by members of Tesla’s internal investigations/security/IT units.”

Finally, Hansen has said that the company never disclosed the theft of $37 million in precious metals and materials used in making the company’s batteries.

The release today follows disclosures from Tripp, the original gigafactory whistleblower, of damaged Tesla batteries that allegedly made their way into actual vehicles.

These disclosures, coupled with allegations of erratic behavior from Tesla chief executive Elon Musk, and the (apparently fictitious) nebulous plans to take the company private, have caused Tesla’s share price to slide over roughly $40 over the last two weeks, erasing nearly $6 billion in value from the company.

The full text of Meissner’s summary of the complaints their client is making is below. Mr. Meissner said that Hansen would not be conducting interviews. The Storey County Sheriff’s Department said they would issue a statement on the Meissner report this evening.

“Mr. Hansen’s allegations were taken very seriously when he brought them forward. Some of his claims are outright false. Others could not be corroborated, so we suggested additional investigative steps to try and validate the information he had received second-hand from a single anonymous source,” a spokesperson for Tesla wrote in an email. “Because we wanted to be sure we got this right, we made numerous attempts to engage further with Mr. Hansen to understand more about what he was claiming and the work that he did in reaching his conclusions. He rejected each of those attempts, and to date has refused to speak with the company further. It seems strange that Mr. Hansen would claim that he is concerned about something happening within the company, but then refuse to engage with the company to discuss the information that he believes he has.”

Client Revised FinaL to Be Released UPDATED by Jonathan Shieber on Scribd

Sony’s bestselling aftermarket CarPlay receiver just got better

Not fond of buying a new car just to enjoy CarPlay? If so, consider Sony’s latest aftermarket receiver with a 6.4-inch touchscreen that brings CarPlay and Android Auto systems to any car, plus support for iDatalink Maestro and more.

If you love CarPlay but aren’t fond of burning cash on a brand-new vehicle just to get CarPlay out of the box, consider Sony’s latest receiver featuring a 6.4-inch touchscreen, CarPlay and Android Auto compatibility, support for iDatalink Maestro and more.... Read the rest of this post here


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Reports indicate that Tesla has been subpoenaed over Elon Musk’s tweets

The long week for Tesla is getting even longer as the company has now been subpoenaed by the Securities and Exchange Commission, according to multiple reports. First reported by the Fox Business Network and confirmed by The New York Times, federal regulators appear to be interested in Elon Musk’s August 7 tweet regarding his plans for […]

The long week for Tesla is getting even longer as the company has now been subpoenaed by the Securities and Exchange Commission, according to multiple reports.

First reported by the Fox Business Network and confirmed by The New York Times, federal regulators appear to be interested in Elon Musk’s August 7 tweet regarding his plans for privatizing the electric car manufacturer and his claims to have found investors committed to finance the transaction.

From later statements it has become clear that Musk had not actually secured financing, and has only had preliminary talks with investors.

Federal securities regulators have served Tesla with a subpoena, according to a person familiar with the investigation, increasing pressure on the electric car company, as it deals with the fallout from several recent actions by its chief executive, Elon Musk.

For Musk, the ill-advised tweet was either a drug-induced bit of foolishness or a short-sighted attempt to address the hordes of short-sellers who have swarmed over the stock, angling to make millions of dollars off of any perceived misfortune in the market.

Tesla declined to comment for this article.

According to the Times, regulators were interested in Tesla even before Musk began his erratic tweeting. They were already questioning Tesla whistleblower Martin Tripp (according to the Times), who has claimed that the company knowingly manufactured batteries with punctured holes, which could impact hundreds of cars; misled the public about the number of Model 3s actually being produced by as much as 44 percent; and lowered vehicle specs so the company could use waste and scrap material in vehicles.

While Tripp’s allegations are explosive enough, they’re now being overshadowed by the current drama over Musk’s tweets, which sent the stock price of his company soaring.

While Tesla has now retained Goldman Sachs to arrange financing for a privatization, at the time of Musk’s tweets last week, no financing had been secured.

That could land the serial entrepreneur in a lot of hot water.

Doug Field leaves Tesla and returning to Apple to work on Project Titan

A former Apple vice president is leaving Tesla to work on Cupertino’s long-secretive “Project Titan” automotive initiative.

Doug Field, who once worked as Apple’s vice president of Mac hardware, is returning to the company after a five-year stint at Tesla. He’s coming back to work on Apple’s all-secretive “Project Titan” automotive initiative, according to Daring Fireball. ... Read the rest of this post here


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Apple hints at plan to build a car after all as it rehires ex-Tesla engineering head

If you’re looking for hints that Apple might deliver on its long-rumored plan to develop its own car, a significant one landed this week after it emerged that Doug Field — Apple’s former VP of Mac hardware engineering — has rejoined from the company after a spell with Tesla. John Gruber at Daring Fireball broke […]

If you’re looking for hints that Apple might deliver on its long-rumored plan to develop its own car, a significant one landed this week after it emerged that Doug Field — Apple’s former VP of Mac hardware engineering — has rejoined from the company after a spell with Tesla.

John Gruber at Daring Fireball broke the news of Field returning to Apple following five years at Tesla where he oversaw the production of the Model 3.

Apple confirmed in a statement to TechCrunch that it has rehired Field, but it declined to give information about this role. Gruber reports, however, that Field will link up with Bob Mansfield, the former colleague he worked with on the Mac hardware business. Mansfield just so happens to be the person who is heading up Apple’s ‘Project Titan’ car project, having been tempted back and out of retirement, so there’s a lot to dig into.

There’s been plenty of speculation about the secretive Project Titan, most notably it was reported in 2016 that Apple had abandoned plans to develop a car. Instead, it was said to be focused on autonomous driving technology. While the project remains pretty opaque and tough to gauge, the hiring of the man who oversaw Tesla production — right after Apple poached a Waymo self-driving engineer — is a pretty interesting clue that suggests Apple might be reviving plans to develop a car once again.

Amazon launches an Alexa Auto SDK to bring its voice assistant to more cars

Amazon this morning announced the launch of a toolkit for developers that will allow them to integrate Alexa into cars’ infotainment systems. The “Alexa Auto SDK” is available now on GitHub, and includes all the core Alexa functions like streaming media, smart home controls, weather reports, and support for Alexa’s tens of thousands of third-party […]

Amazon this morning announced the launch of a toolkit for developers that will allow them to integrate Alexa into cars’ infotainment systems. The “Alexa Auto SDK” is available now on GitHub, and includes all the core Alexa functions like streaming media, smart home controls, weather reports, and support for Alexa’s tens of thousands of third-party skills. It will also add new features just for auto users, like navigation and search, Amazon says.

The source code and function libraries will be in C++ and Java, allowing the vehicles to process audio inputs and triggers, then connect with the Alexa service, and handle the Alexa interactions.

In addition, Amazon is offering a variety of sample apps, build scripts, and documentation supporting Android and QNX operating systems on ARM and x86 processor architectures.

The SDK will allow for streaming media from Amazon Music, iHeartRadio, and Audible, for the time being, and will allow customers to place calls by saying the contact’s name or phone number. These will be launched over the native calling service in the vehicle.

Plus, it can tap into a native turn-by-turn navigation system, when customers specify an address or point of interest, or if they cancel the navigation.

A local search feature lets customers search for restaurants, movie theaters, grocery stores, hotels, and other business, and navigate to the location.

This is not the first time Alexa has come to cars, by any means. Amazon has been working with car makers like Ford, BMW, SEAT, Lexus and Toyota, who have been integrating the voice assistant into select vehicles. Alexa is also available in older cars through a variety of add-on devices, like those from AnkerMuse (Speak Music)Garmin, and Logitech, for example.

With this SDK, Amazon is opening the voice assistant to other developers building for auto, who don’t yet have a relationship with Amazon.

 

 

The SEC wants Tesla to explain Elon’s 420 tweet

Elon Musk, billionaire founder of Tesla, startled the Twittersphere yesterday by announcing he wanted to take the company private at the price of $420 per share. While some speculated the tweet was a joke or a marijuana reference, others took to the market. The tweet sent the stock soaring up 11 percent, causing a halt in […]

Elon Musk, billionaire founder of Tesla, startled the Twittersphere yesterday by announcing he wanted to take the company private at the price of $420 per share. While some speculated the tweet was a joke or a marijuana reference, others took to the market. The tweet sent the stock soaring up 11 percent, causing a halt in trade for a portion of the day.

Now, the Securities and Exchange Commission is looking into the matter.

Wall Street Journal sources say the SEC has since made inquiries to Tesla to find out whether Musk’s tweet was truthful and why he chose to announce such a move on Twitter instead of through a regulatory filing. Musk could be held legally liable if regulators determine he was intentionally trying to boost the stock price with his tweet.

Musk later explained in a letter to employees going private was “the best path forward” as it would shield the company from “wild swings in our stock price that can be a major distraction” and relieve pressure from quarterly earnings cycles that aren’t necessarily in the best long-term interest of the company. We’ve reached out to the SEC and Tesla for more information on the matter.

Musk also indicated in the tweet he’d secured funding for the startling move, though it’s unclear where the funding would be coming from at this time as he has yet to disclose those details. The tweet appeared shortly after news broke that a Saudi Arabian sovereign wealth fund bought a $2 billion stake in Tesla and, according to the WSJ, Musk spoke with a group of Tesla’s board members last week about taking the company private.