Elon Musk’s alleged partying and drug use with Tesla Inc board members may be causing discomfort among investors, but these issues are overshadowing more significant execution problems at the company, according to a long-time Tesla shareholder.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, pointed to a recent Wall Street Journal report that suggested Musk had used drugs with his executives. This, he said, could be a deterrent to institutional investors.
Gerber said that these allegations, along with Musk’s infamous marijuana incident on Joe Rogan’s podcast in 2018, could be making institutional investors uncomfortable. “People want to have confidence in a board of directors in a company,” Gerber said in an interview with CNBC.
“It’s really hard to get institutions to invest billions of dollars in a company when the CEO sort of admits to doing psychedelics.”
Gerber believes that these distractions are diverting attention from the company’s deeper issues, such as its underperforming stock and the need to deliver on promised initiatives.
Despite the allegations, Musk has been vocal about his stance on drug use. In a recent post on X, Musk said, “If drugs actually helped improve my net productivity over time, I would definitely take them!” This was in response to a Wall Street Journal article that described Musk as a user of hard illicit drugs, drawing worries from the board and investors over not just his well-being but also the government contracts his companies benefit from.
Gerber, a long-time Tesla investor, has been critical of Musk’s leadership. Previously he called Musk the “most delusional CEO” he’s ever invested with, expressing concerns about the impact of Musk’s controversial public statements on the company’s stock.
It is clear that Musk’s alleged partying and drug use are causing discomfort among investors, but it is essential to focus on the more significant execution problems at Tesla. These distractions are diverting attention from the company’s underperforming stock and the need for it to deliver on promised initiatives. Institutional investors want confidence in a board of directors, and Musk’s behavior may be hindering their willingness to invest in Tesla. It remains to be seen how these issues will impact the company’s future.
