Most investors should expect an exodus in executives at Tesla (NASDAQ: TSLA). The erratic behavior of CEO Elon Musk on Twitter and the unsustainable push to lift Tesla Model 3 production puts into question the fair value of the company. Now down around 30% from yearly highs, speculators should steer clear of TSLA stock.
On Sep. 7, Bloomberg reported that Tesla’s HR chief, Gabrielle Toledano, won’t return after taking a leave in August. The exit signals difficulty for Tesla in hiring top talent, if any at all. A freeze on hiring would severely limit the company’s production growth. At a time when Wall Street demands an increase in Model 3 builds, Tesla may not meet those expectations.
On the same day of the HR announcement, Chief Accounting Officer Dave Morton resigned after working for only one month at Tesla. The executive issued a statement that he was taken aback on the public attention placed on the company and the pace within the company.
The CAO’s departure, ahead of third-quarter results, does not imply the company will miss expectations. But his departure, well before the end of the quarter, means he cannot be held responsible for any legal filings.
Takeaway
Put options could continue rewarding bearish investors as the stock falters. While the brand name and strong public interest will keep supporting Tesla stock, value investors should look elsewhere. Ford (NYSE: F) and GM (NYSE: GM) come to mind.
Disclosure: Author owns shares of Ford.
