Usually, a media appearance by your CEO on a popular news or entertainment program translates into positive PR, especially when that CEO has a great time talking with the host. After Elon Musk appeared on “The Joe Rogan Experience,” however, Tesla’s share price fell more than six percent the following morning.
Insofar as the company is concerned, Tesla is doing well and making its customers happy.
The reason given for the stock drop in that Musk was seen to have “apparently” smoked marijuana during the program. Now, it wouldn’t surprise anyone to learn that someone smoked pot on Rogan’s show. The libertarian host is a proponent of legalizing weed, and his fans appreciate his outspokenness on this issue.
Musk is no stranger to being outspoken, and that habit has gotten him in some trouble in recent months. An ill-advised Twitter spat led to some rumblings that someone needed to be minding the store over at Tesla, but arguing on Twitter, while frowned on, doesn’t carry the social stigma that marijuana use does in many areas of American culture.
In the video, Musk can be seen checking texts and laughing about friends asking why he’s smoking weed during the interview. The next morning, the stock price started to fall.
Others have a different explanation of why the stock price fell, one that has nothing to do with the CEO’s behavior. Right about the time the Rogan-Musk puff-pass video was gaining steam, Tesla announced that chief accounting officer Dave Morton was leaving the company a month after he took the job. Morton cited the public fire aimed at Tesla, as well as the pace of the job, as his reasons for stepping away:
“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 …”
There’s no doubt that abrupt changes in primary positions in a company can cause the stock price to dip. Investors don’t appreciate uncertainty. Given that, there’s a strong case that it was Morton’s decision, and not Musk’s smoke-out, that cause the price to drop.
The fact that Morton tried to leave graciously speaks to the company’s attempts to keep investors and the market in general from thinking things were amiss at Tesla, but the juxtaposition of a screen capture of Musk appearing to hit a joint and Morton resigning was not a good look for a company just getting past Musk-related PR issues.