Tesla stock falls after Musk 'smokes marijuana' during web interview

5:28 pm, September 7, 2018

SHARES in Tesla tumbled as the markets opened today 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, 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 Rogan, who said it was legal.

The company announced today that chief accounting officer Dave Morton had resigned after a month, citing public attention and the fast pace of the post. It announced the departure in a regulatory filing and said Morton had no disagreements with Tesla’s leadership or financial reporting.

Shares fell about seven per cent as trading opened.

Shortly after smoking in the video, 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 doesn’t notice any effect from the joint and claims he rarely smokes.

According to a company filing with the US Securities and Exchange Commission, 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.

‘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 Musk, but in the second quarter it burned through 739.5 million dollars in cash and lost a quarterly record 717.5 million dollars.

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 dollars, although the cheapest one that can be bought at the moment costs 49,000 dollars.

Moody’s Investor Service downgraded Tesla’s debt into junk territory in March, warning that the Palo Alto firm won’t have cash to cover 3.7 billion dollars 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. It added that its accounting functions will be overseen by the chief financial officer and corporate controller.