Tesla’s stock price took a tumble after CEO Elon Musk announced, at the end of a Thursday night earnings call, that Chief Financial Officer Deepak Ahuja was heading into retirement.
Ahuja joined Tesla in 2008, 15 years after first joining Ford and becoming CFO of its AutoAlliance joint venture with Mazda. He then served in an identical role for Ford’s southern Africa region. At Tesla, Ahuja returned to the CFO role after a two-year retirement hiatus from 2015 to 2017.
Ahuja’s successor doesn’t have quite as lengthy a CV to draw from. Twenty-two years younger than his predecessor and just six years out of business school, Zach Kirkhorn’s rise to the CFO spot has some analysts rattled.
Kirkhorn, 34, joined Tesla nine years ago and serves as the company’s VP of finance. While a business school degree is something you’d want to see in a chief financial officer’s past, Kirkhorn’s past does not contain experience in the CFO chair.
Tesla’s stock fell nearly four percent in early Thursday trading, rebounding to just below Wednesday’s close by afternoon.
As reported by CNBC, the loss of Ahuja is seen by many as a threat to the company’s stability, despite the automaker’s two consecutive quarters of profitability and the ironing out of production hurdles on the Model 3 line. No shortage of braintrust has left the company as of late, especially in the past year.
AB Bernstein wrote, “We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO, just six years removed from business school.”
Goldman Sachs is of a similar mind, telling investors, “We believe the changeover may cause some uncertainty for investors as Tesla just saw two consecutive quarters of profitability and positive cash flow, and we see potential for a less stable path forward due to a sequential step-down in deliveries, working capital headwinds and convertible debt payment.”
J.P. Morgan Chase expects “investors to react negatively to the replacement of Deepak Ahuja,” while Barclays holds a pessimistic outlook for the stock, citing Kirkhorn’s lack of experience.
Deutsche Bank doesn’t think much of Ahuja’s departure, calling his retirement “unremarkable.” While the automaker faces flattening production in America, an influx of vehicles to Europe and China bodes well for the future, the bank said.
While Kirkhorn will hold the reins once Ahuja departs in the coming months, his predecessor apparently isn’t disappearing to a desert island. In his earnings call, Musk said the retiring CFO will be held on as an advisor.
[Image: LinkedIn]
Here’s the deal Zach. I’ll make you Tesla CFO if you agree to keep the 2 sets of books that the departing coward Ahuja set up for us. The first is the public book that shows a profit, and the second is the private book that shows the S–t storm we are actually in. Think how jealous your B-school classmates and professors will be that you are CFO of a company with a larger cap than Ford or GM only 8 years out of school and before you have even paid off your school loans!!! Don’t worry about jail time – you can count on good ole Elon to bail you out, and besides nobody is going to want to throw a person who is saving the planet from global warming in jail. Say yes, and I’ll announce your promotion just before I take the private jet for a cheeseburger in Austin. You are going to be great kid – just sign right here and smile for the cameras.
I get a cheeseburger too or no deal, Mr. Musk.
Good luck polishing the turd that is Tesla.
No worry, the fascist financial oligarchs will always prop up the stock price when it falls. They always do. Watch for that huge buy order from the Cayman Islands :)
Too many assumptions are being made on too little data about the incoming officer; we honestly don’t know if he even has the skills, much less the experience needed. On the other hand, he might… MIGHT, mind you…be one of those geniuses that can pinch every penny to the max and STILL see the company build a decent car. No bets… but it is possible.
@vulpine: You’re right. Warren Buffett was about the same age as this guy when he took over Berkshire Hathaway. You never know.
Drawing firm conclusions with very limited information is what social media is all about.
I feel a protest coming on.
6 years out of school.
Bad Call. There are probably 100 people more qualified out there. Musk picking him is evidence of very poor judgement.
Poor judgment? Probably brilliant judgment. Hard charger, overeager, and with the hubris and lack of self-reflection that seems to categorize most millennials….he’s actually the perfect bagholder.
The average age of the engineers in the Apollo 11 flight control room was 28, and they had three lives in their hands while the whole world watched.
I’m not concerned with Mr Kirkhorn’s age. But it makes for more tasty point-and-smirk press around here.
“Wall Street” is wrong about Tesla most of the time, anyway, but for negative news they’re viewed as quite reliable at TTAC.
Ford’s CFO is 66; how’s that working out?
“The average age of the engineers in the Apollo 11 flight control room was 28, and they had three lives in their hands while the whole world watched.”
Especially the (young) guy who made the call–don’t recall his name–when the lander started throwing an error code as they approached the moon. He had a few seconds to decide whether to continue, and possibly kill Neil and Buzz, or abort the landing. He RTFMs, says it’s just a routine CPU overload code, ‘reboot the computer,’ and the rest, as they say, is history.
What was the average age of the engineers behind Apollo 1 and 13?
If I were this guy I would run quickly in the other direction. He has bagholder written all over him.
Similar to how Kushner is Trumps highest trusted advisor, and is behind a lot of policy decisions affecting us all.
That didn’t take long for POLITICS to get involved :=(