Executive Turnover At Tesla Is Massive – Warning Sign?

Whitney Tilson’s email to investors discussing Tilray Inc (NASDAQ:TLRY) hits my price target, down 90%; Update on my big calls on Beyond Meat Inc (NASDAQ:BYND) and Tesla Inc (NASDAQ:TSLA); Executive turnover at Tesla – how bad is it REALLY?; CEOs Who Cheat in Bedroom Will Cheat in Boardroom, Study Shows; Gun stolen during anonymous masked orgy.

Executive turnover at Tesla

dominickvietor / Pixabay

1) Eleven months ago, on September 19, pot stock Tilray peaked at $300.

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Q2 hedge fund letters, conference, scoops etc

That very hour, I predicted on Yahoo Finance TV that the stock was in an enormous bubble/short squeeze and would decline by 90% in the next year. Well, it hit my $30 price target yesterday, one month ahead of schedule...

A year ago, it had nearly a $30 billion market cap and only $28 million in trailing revenue, so it was trading at more than 1,000 times revenues.

Today, with $89 million in revenue and a $2.9 billion market cap, it's down to "only" 33 times revenues. Still way too rich for my blood...

2) Three weeks ago today in my daily e-mail, I compared market darling Beyond Meat (BYND) with Tilray, writing:

Both Tilray and Beyond Meat are real companies, not frauds, in exciting sectors that are sure to see tremendous growth. But trading at over 100 times trailing revenues, their stocks were or are caught up in obvious bubbles. The Beyond Meat one today isn't quite as extreme as Tilray's was at its peak, so I'll make a somewhat more conservative forecast: The stock will be cut in half – below $100 – by the end of the year.

At the time, Beyond Meat's stock was at $194.76. It closed yesterday at $144.51, down 26% and well on its way to hitting my price target...

3) My third big call over the past year was on March 4, when I predicted that Tesla (TSLA) – then at $295 – would also be below $100 by the end of the year.

This is a heck of a resilient stock, thanks to a tremendous Elon Musk fan base. So it may take a little longer to get to my price target, but I still think it's likely to get there...

Speaking of Tesla, Toni Sacconaghi, the excellent Bernstein analyst on the stock, issued an interesting new report last week, titled "Executive turnover at Tesla – how bad is it REALLY?" It's a great piece of analysis – and pretty damning for Tesla (though not as damning as some might have believed)...

I don't have permission to share all of it, but here is the first page with the summary and here are two articles about it:

a) Tesla executives are jumping ship more often than at other companies. It could be an ominous sign for the rest of its leadership team, Business Insider. Excerpt:

  • Tesla executives and other top leaders are leaving in droves amid a tumultuous year at Elon Musk's electric-car company.
  • New research from Bernstein analysts quantified the exits, and found that they're higher than at any other comparable company.
  • If the rate holds, Tesla could lose 150 senior leaders in less than four years, as questions swirl about its hiring and cultural practices.

b) If Elon Musk is your boss, get your resume ready, LA Times. Excerpt:

High executive turnover at Tesla is no secret. Short sellers even keep a list of executive departures. The longtime chief financial officer quit in February. The latest in a string of top lawyers left the same month, just two months into the job. The head of the Autopilot program departed in April

Lastly, one of my readers, Paul Huettner, e-mailed me:

I've compiled and regularly update a list of all of Tesla's executive departures here, and I cover these departures and other Tesla info on Twitter here.

4) A hat tip to the economists who did this study – proving what anyone would have suspected: CEOs Who Cheat in Bedroom Will Cheat in Boardroom, Study Shows. Excerpt:

  • Finance profs examined 2015 Ashley Madison hacked user-data.
  • Cheating brokers, cops also more prone to misconduct at work.

Cheating on your spouse goes hand in hand with cheating in the workplace.

That's the conclusion of a provocative new academic study that found a strong correlation between adultery and workplace misconduct by corporate executives and financial advisers.

5) Speaking of risqué topics, here's one of the best headlines ever (and a true story)! Gun stolen during anonymous masked orgy, police admit 'we're probably not going to solve this one'. Excerpt:

Complicating matters further, participants at the sordid soiree were encouraged to use aliases. The unidentified host, who reported his pistol missing, only knew a handful of people who passed through his home during the erotic event, according to the report.

Best regards,

Whitney




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold