CEO Elon Musk’s management style has come under scrutiny in recent months. Most of the time investors express nervousness about his methods. They got a bit of new Thursday that can soothe some fears.
Thursday morning, Linda Yaccarino, CEO of X, which was formerly Twitter, talked with CNBC, saying at one point she has the authority to run the company her way. “Mine and Elon’s roles are very clear,” said Yaccarino. “Elon focuses on product design…I’m responsible for the rest…I have autonomy in doing that. ”
She was, of course, talking about X. That might not directly impact Tesla stock (ticker: TSLA) but it’s tangentially good news. For starters, it shows Musk is willing to delegate to strong managers. It also shows he’s spending more time at Tesla.
Time at Tesla has been a topic for a while. Tesla stock was at about $225 when Musk closed his purchase of then-Twitter in October 2022. Tesla stock closed out the year at $123.18 apiece. The drop was partly catalyzed by worries over management distraction.
Musk addressed the issue at Tesla’s May 2023 shareholder meeting, saying Twitter was in a more stable place than when he purchased it, and he wouldn’t be spending as much time on Twitter issues.
That was a positive for Tesla shareholders who got a new, unwelcome management jolt this week when they learned Chief Financial Officer Zachary Kirkhorn was leaving Musk’s car company. It was surprising. What’s more, the abrupt nature of the announcement and CFO transition also reminded investors of some rapid turnover in the C-suite at Tesla in prior years. One CFO lasted less than two years. A chief accounting officer lasted less than two months on the job.
Instability at the top always raises the question of who can run Tesla but Musk? Investors don’t have a deep knowledge of Tesla’s management bench. Only engineering chief Andrew Baglino, Kirkhorn, and Musk were listed as executive officers in the 2023 proxy report.
That’s why Yaccarino’s autonomy is a good sign for Tesla investors. Now Tesla shareholders just have to identify who her equivalent is at Tesla—someone who is capable, and has also earned the trust of Musk.
Tesla stock is up 0.8% in midday trading, while the
are up 0.4% and 0.3%, respectively. Coming into Thursday trading, Tesla stock is down 4.6% since investors learned that Kirkhorn was no longer CFO.
Write to Al Root at firstname.lastname@example.org