Tesla stock plunges after Elon Musk ‘smokes marijuana’ during web interview

The company also lost its accounting chief after a month in the job on a day of turmoil


Elon Musk (AP Photo/Kiichiro Sato, File)
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Tesla CEO and Chairman Elon Musk unveiling the Roadster 2 during a presentation in Hawthorne, California last year, the billionaire’s tweet has sparked debate over the electric car maker’s future. Photo; Reuters

Shares in Tesla tumbled as the markets opened on Friday after company boss Elon Musk appeared to smoke marijuana during an interview and the company’s accounting chief left after a month in the job.

During a podcast shown on YouTube, Mr Musk inhales from what the host says is a combined marijuana-tobacco joint.

The chief executive was appearing on The Joe Rogan Experience. The joint was provided by Mr Rogan, who said it was legal.

On Friday the company announced that chief accounting officer Dave Morton had resigned after a month, citing public attention and the fast pace of the post.

The company announced the departure in a regulatory filing. It said Mr Morton had no disagreements with Tesla’s leadership or financial reporting.

Shares fell about 7pc as trading opened on Friday.

Shortly after smoking in the video, Mr Musk looks at his phone and laughs, telling Rogan he is getting texts from friends asking why he is smoking weed during the interview.

Later he says he does not notice any effect from the joint and claims he rarely smokes.

Mr Morton said: “Since I joined Tesla on August 6, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” according to a company filing with the US Securities and Exchange Commission.

“As a result, this caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting.”

Tesla is under extreme pressure to turn a sustained net profit starting this quarter, as promised by Mr Musk, but in the second quarter it burned through $739.5 million (€648m) in cash and lost a quarterly record $717.5 million (€620m).

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Mr Musk has said the company is producing more than 5,000 Model 3 electric cars per week, and cash generated from the sales will bring sustained quarterly profits.

The Model 3 starts at $35,000 (€30k), although the cheapest one that can be purchased at present costs $49,000 (€42.5k).

Moody’s Investor Service downgraded Tesla’s debt into junk territory in March, warning that the Palo Alto firm will not have cash to cover $3.7 billion (€3.2bn) for normal operations, capital expenses and debt that comes due early next year.

Tesla said cash from Model 3 sales will pay the bills and drive profits.

The company said its accounting functions will be overseen by the chief financial officer and corporate controller.

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