Elon Musk‘s alleged partying and drug use with Tesla Inc TSLA board members might be causing discomfort among investors, but these issues are overshadowing more significant execution problems at the company, according to a long-time Tesla shareholder.
What Happened: Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, pointed to a recent Wall Street Journal report that suggested Musk had used drugs with his executives. This, he said, could be a deterrent to institutional investors, reported Business Insider on Monday.
Gerber said that these allegations, along with Musk’s infamous marijuana incident on Joe Rogan‘s podcast in 2018, could be making institutional investors uncomfortable. “People want to have confidence in a board of directors in a company,” Gerber said in an interview with CNBC on Monday.
“It’s really hard to get institutions to invest billions of dollars in a company when the CEO sort of admits to doing psychedelics.”
“There’s no desire from anybody at Tesla or within Elon’s circle to have an independent board. Elon controls the company 100%,” he said.
“It’s going to be very hard for the company to move forward with the current board, and this is I think one of the reasons the stock is selling off,” Gerber said.
Why It Matters: Musk has denied the allegations, claiming he was clean in drug tests mandated by NASA. However, Gerber believes that these distractions are diverting attention from the company’s deeper issues, such as its underperforming stock and the need to deliver on promised initiatives.
Despite the allegations, Musk has been vocal about his stance on drug use. In a recent post on X, Musk said, “If drugs actually helped improve my net productivity over time, I would definitely take them!” This was in response to a Wall Street Journal article that described Musk as a user of hard illicit drugs, drawing worries from the board and investors over not just his well-being but also the government contracts his companies benefit from.
Gerber, a long-time Tesla investor, has been critical of Musk’s leadership. Previously he called Musk the “most delusional CEO” he’s ever invested with, expressing concerns about the impact of Musk’s controversial public statements on the company’s stock.
Elon Musk. Image generated via AI on MidJourney
Engineered by
Benzinga Neuro, Edited by
Kaustubh Bagalkote
The GPT-4-based Benzinga Neuro content generation system exploits the
extensive Benzinga Ecosystem, including native data, APIs, and more to
create comprehensive and timely stories for you.
Learn more.
Image and article originally from www.benzinga.com. Read the original article here.