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Tesla Shares Sink as CEO Elon Musk Gives Revealing New York Times Interview

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【Summary】​In an emotional interview with the New York Times, Tesla CEO Elon Musk opened up about his difficult and stressful year he’s had trying to ramp up production of the Model 3, while simultaneously trying to control the company’s massive cash bleed. On Friday, the electric car maker’s stock fell to its lowest levels in five months.

Jeremy Carlton    Aug 17, 2018 3:58 PM PT
Tesla Shares Sink as CEO Elon Musk Gives Revealing New York Times Interview

In an emotional interview with the New York Times, Tesla CEO Elon Musk opened up about his difficult and stressful year he's had trying to ramp up production of the Model 3, while simultaneously trying to control the company's massive cash bleed.

On Friday, the electric car maker's stock fell to its lowest levels in five months as Musk's comments drew the attention of federal regulators who are pressuring Tesla's directors for details on how much information Musk shared with them.

Tesla shares were down another 9 percent today to around $305.50. Tesla stock is down nearly 20 percent in the past ten days. On August 7, the day Musk tweeted about taking Tesla private, the stock traded around $379.57 per share.

In the hour-long interview, where Musk became emotional, he said that "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 indicating he is considering taking Tesla private for $420 per share and that he already had secured funding. Musk admitted that he did not consult with anyone at the company before sending the controversial tweet on August 7.

The Times also reported that efforts were underway to find a No. 2 executive to help take some of the daily pressure off Musk, who has been dealing with production issues for its key Model 3 sedan and criticized for his erratic behavior on Twitter.

Musk said in the interview he has no plans to relinquish his dual role as chairman and chief executive officer.

More recently, Musk publicly criticized journalists over what he called unfair coverage of Tesla. He also issued tweets directed at Wall Street short sellers. Musk said Tesla's shares were the "the most shorted stock in the history of the stock market."

"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."

Tesla has been burning through cash as it aggressively ramps up Model 3 production and come out of what Musk has called a "production hell". The affordable mass-market Model 3 is key for Tesla to become profitable. However not everyone agrees.

However, UBS analyst Colin Langan wrote in a note that Tesla could actually lose $6,000 on every base model due to the higher costs of the electric powertrain.

The investment firm said the carmaker's premium Model 3 sedan will also not produce better profit margins than a conventional BMW, the luxury German automaker Tesla is competing against with the mass-market Model 3.

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