(Reuters) – Tesla Inc’s (TSLA.O) shares slumped as much as 9 percent on Friday after Chief Executive Elon Musk told the New York Times that his tweet last week about taking the company private was not reviewed by anybody.
FILE PHOTO: The Tesla logo is seen at the entrance to Tesla Motors’ new showroom in Manhattan’s Meatpacking District in New York City, U.S., December 14, 2017. REUTERS/Brendan McDermid/File Photo
The electric car maker’s stock was set for its worst day in nearly five months as Musk’s comments come at a time when federal regulators are pressuring Tesla’s directors for details on how much information he shared with them.
The paper also reported that efforts were underway to find a No. 2 executive to help take some of the pressure off Musk, who has been dealing with production issues for its key Model 3 sedan and criticized for his erratic behavior on Twitter.
“There are growing concerns that the board may consider changing his specific role from CEO and chairman and there could be pressure from the SEC to do this as well based on his tweeting activity,” said Ivan Feinseth, analyst at Tigress Financial Partners.
“While this may be a governance issue it would be a very disappointing company issue because Elon Musk’s vision and personality is so intertwined in the company.”
Musk said in the interview he has no plans to relinquish his dual role as chairman and chief executive officer.
In the hour-long interview, where Musk choked up multiple times, he said: “This past year has been the most difficult and painful year of my career. It was excruciating.”
Musk stunned markets last week with a tweet that he was considering taking Tesla private for $420 per share and that he had secured funding.
Musk’s rocket company, SpaceX, could help fund a bid to take Tesla private, the New York Times reported on Thursday, quoting people familiar with the matter.
The money-losing company has been burning through cash as it aggressively ramps up Model 3 production and come out of what Musk has called a “production hell”.
Analysts at UBS, however, have questioned the profitability the Model 3, saying that Tesla could lose $6,000 on every base model.
The brokerage said the carmaker’s premium Model 3 sedan will also not produce better profit margins than a conventional BMW (BMWG.DE).
Reporting by Nivedita Balu in Bengaluru; Editing by Bernard Orr and Saumyadeb Chakrabarty