New headaches for Elon Musk. After strikes and other misadventures of the South African entrepreneur, the latest investigation by the Wall Street Journal, which alleges his use of drugs and continuous consumption of ketamine, could be the straw that breaks the camel’s back.
Which camel? The one belonging to the board of directors of his most famous creation, Tesla, repeatedly tested by increasingly impatient and dissatisfied shareholders. So much so that it has put the directors in a dilemma about what to do with their CEO.
Musk’s actions have adversely affected Tesla
As mentioned, the latest Wall Street Journal article tells an unhappy story for Musk, who appears to be using a continuous supply of heavy drugs such as ketamine, LSD, cocaine, ecstasy, mushrooms, and other substances that would undermine his clarity. This would indeed explain many absurd behaviors of the entrepreneur, but what scares Tesla’s board the most is perhaps the most damaged in terms of image and not just in the face of the reckless choices of its leader.
In 2023, shareholders expressed deep disappointment in the board, accusing Musk of being distracted by his numerous commitments with the countless other companies he has taken over. For example, the acquisition of Twitter in 2022 (now X Corp.) cost the Californian brand a loss of $672 billion in market capitalization. Today, Elon Musk’s capricious behavior in Scandinavia is causing significant damage, both in terms of reputation and economically, as workers in Sweden, Norway, and Denmark are boycotting the entire brand’s supply chain.
The WSJ investigation comes after that of the New York Times, which reported Musk’s use of Zolpidem in 2018, the same year he smoked marijuana during comedian Joe Rogan’s podcast. At the time, the SEC replaced Musk as chairman, appointing two new independent administrators as required by the resolution for fraud allegations by the U.S. Securities and Exchange Commission.
This time, however, the consequences could be more serious: in 2018, Musk still had a stable reputation, which has deteriorated over the years. Being ousted from Tesla, however, would be very detrimental to him, as while Twitter is plummeting precisely since he took over, it is from the electric car company, which is selling more and more, that he derives the majority of his wealth, about 44% of his net worth of $219.4 billion, as reported by the Bloomberg Billionaires Index.
How Tesla could change
Elon Musk and his brother Kimbal are the longest-serving directors of Tesla, on the board since its founding in 2004. Moreover, Kimbal’s re-election had already been rejected by an investor due to his lack of experience. After them is the current Chairman Robyn Denholm, on the board since 2014 and in that role since 2018, often described as the true leader of Tesla. Today, it is unknown how close the two are, but as recently as 2019, Denholm used to praise Musk for his “wise use” of Twitter.
Closer to him are the other four executives: James Murdoch, former CEO of 21st Century Fox; Kathleen Wilson-Thompson, former HR head of Walgreens Boots Alliance; Joe Gebbia, co-founder of Airbnb Inc.; and finally, JB Straubel, co-founder of Tesla itself. However, if they were to turn their backs to save face and their positions, it is likely that Denholm would succeed Musk. Still, nothing is certain: what is certain is that in the last year, everything that has happened has put Musk and his brands in challenging positions.
Source: Wall Street Journal
