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Tesla investors got an unwelcome surprise on Monday. The stock is falling.
Ina Fassbender/AFP via Getty Images
Tesla
stock is dropping in Monday trading. Unexpected and unexplained management turnover is the reason.
CFO Zachary Kirkhorn, who also holds the title of Master of Coin, has stepped down after 13 years with the company and four as CFO. Chief accounting officer Vaibhav Taneja took over on Friday, while Kirkhorn will continue at Tesla (ticker: TSLA) until year-end.
The speed of the shift is one thing that might be unnerving investors. Another issue is that the reason for the change isn’t known. Tesla didn’t respond to a request for comment.
Whatever the reason, the shift is a surprise. Kirkhorn is respected by the investment community. Some even thought he could take on an expanded role in the future if CEO Elon Musk wanted to do less at the company.
Tesla stock was down 3.7% in midday trading at $244.27. The
S&P 500
was up 0.5% and the
Nasdaq Composite
had lost 0.2%. The drop wipes some $30 billion off Tesla’s market capitalization.
“The oddest aspect of Zach’s resignation is the timing….most amicable resignations where a top exec has been at a firm for 10-plus years have a transition period,” said
Future Fund Active ETF
(FFND) cofounder Gary Black. He speculated that Kirkhorn may have been thinking of leaving and that Musk didn’t take the news well. “Doubt it’s the upcoming cage match,” Black added.
Musk and
Meta Platforms
(META) CEO Mark Zuckerberg have spoken about potentially squaring off in a mixed martial arts fight.
Tesla is the only company in the S&P 500 that has shareholders talking about both MMA and management change. It isn’t a typical company. Musk also controls X, formerly called Twitter, SpaceX, and a few other companies.
Musk’s other interests are a reason that investors like management stability at Tesla, although they don’t always find it. Deepak Ahuja was CFO from 2008 through 2015, when Jason Wheeler took over. Wheeler left 14 months later to be succeeded by Ahuja, who served until Kirkhon took the post in early 2019.
Taneja, the former chief accounting officer and new CFO, took the role in early 2019, succeeding Dave Morton, who took the job in August 2018 and left the next month. Morton said at the time that the the job involved more public attention than he had expected, and that he had no disagreements with Tesla’s leadership or financial reporting.
Many on Wall Street will weigh in on the latest switch. Baird analyst Ben Kallo wrote Monday the move didn’t change his opinion, saying Taneja is experienced and noting that he has been at Tesla for six years.
Kallo rates shares Buy and has a $300 price target for Tesla stock.
Tesla stock is now up about 100% year to date and up about 45% over the past three months. Shares are still down about 14% over the past 12 months.
Write to Al Root at allen.root@dowjones.com
