When I was learning about investing in the stock market, I was surprised to discover how important a company’s leadership is. Any risk-averse investor knows that a great company is run by a diligent and visionary CEO, among other executives. Elon Musk seems to fit the bill, but his latest behavior leaves me wondering how investors will react.
Forbes released an article last Friday commenting on Tesla’s falling share price and Elon Musk’s marijuana use on Joe Rogan’s podcast. In the world of investor and CEOs, Elon Musk is one of a kind. Forbes notes how “At times the stock has spiked because of the mere mention of a new idea by Musk, with little concrete plans for monetizing it in the future. Musk, his personality and his ideas seemed to be enough to keep the stock price rising.” Investors should be wary because the US Government may revoke Musk’s security clearance due to his smoking, yet they are not. I am intrigued how Musk’s leadership can so easily sway stock prices; regardless, he needs strong executives to help run Tesla. Before the podcast released, two of Tesla’s executives resigned, which led to a fall in Tesla’s stock price. The two executives left due to, in part, the “public attention.” In context with the leaders of Apollo, I find this story interesting because no large project can be achieved with the efforts of a single man. Musk cannot popularize electric cars by himself, nor could Shea or von Braun or Low put a man on the moon alone. Like the Apollo mission, Musk’s employees are known to work overtime. They are creating a community of practice of diligence and hard work; however, this community means nothing if they cannot keep creative executives to lead the company and appease investors. As Forbes concludes, “If Tesla shareholders no longer see Musk as the messiah of electric vehicles will there be anything left to shore up the company’s stock?” Musk is playing a dangerous game, forcing investors into a risky situation over and over again. I would hate to see the electric car industry come crashing down because of Musk ruined his public image, forced executives out, and lost investors’ faith in him. I think the relationship between company leadership and the stock price is too clear to be overlooked – a company cannot be profitable or develop successful technologies without having satisfied workers. Overall, company culture is one of the most important factors in keeping employees happy and fruitful, which, in turn, can lead to profit and happy investors.