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(Reuters) – Tesla Inc Chief Executive Elon Musk was filmed smoking marijuana and wielding a sword on a webcast, just hours before the automaker said its recently-appointed accounting chief would leave, the latest in a string of unusual behavior and executive departures that have stunned investors.
Shares of the electric carmaker tumbled more than 6 percent on Friday to $ 263.24, with investors on edge after a tumultuous August during which Musk proposed and then abruptly pulled the plug on a go-private deal.
Chief Accounting Officer Dave Morton resigned after just one month in the job because of discomfort with the attention on the company and pace of work during that time, Tesla said in a filing on Friday. It later said that Chief People Officer Gaby Toledano would not return from a leave of absence, just over a year after joining.
Later on Friday, Tesla named a new president of automotive operations, promoting eight-year Tesla employee and former Daimler truck exec Jerome Guillen into the role overseeing all automotive operations and reporting to Musk.
That move, described in a company blog with several other promotions as a result of board and management discussions, gives Musk a seasoned auto industry veteran to lean on at a time when some investors have called for a new chief operating officer. Shares barely moved after hours, when the promotions were announced.
Morton and Toledano, whose departures come shortly after the U.S. Securities and Exchange Commission opened an inquiry into Musk’s aborted privatization plan, join dozens of senior executives who have left Tesla.
“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations. As a result, this caused me to reconsider my future,” Morton said in the filing.
Late on Thursday, Musk was filmed drinking whiskey, briefly smoking marijuana and wielding a Samurai sword during a 2-1/2-hour live Web show with comedian Joe Rogan that swiftly spread across social media.
Taking a puff from a joint, which Rogan said was a blend of tobacco and marijuana and legal in California, Musk said he “almost never” smoked.
“I’m not a regular smoker of weed,” Musk said. “I don’t actually notice any effect … I don’t find that it is very good for productivity.”
It was the latest in a string of unconventional behavior by the billionaire South African native who is also CEO of rocket startup SpaceX.
Even before Musk’s surprise Aug. 7 tweet that he had funding “secured” for a go-private deal, Tesla had been under scrutiny from investors, analysts and short-sellers as it works to hit production targets and slow its cash burn.
Morton, who is walking away from a $ 350,000 base salary and a $ 10 million new-hire stock grant that would vest over four years, said he believed “strongly” in Tesla and that he had no disagreements with the company’s leadership or its financial reporting.
Analysts on Friday reiterated their call for Tesla to bring in another senior leader.
“We have been calling for a co-CEO or COO to assist to codifying the leadership structure and in so doing, the culture at Tesla,” said James Albertine, analyst at brokerage Consumer Edge, speaking before the promotions were announced.
“We think this is further evidence that the time is now for management and the board to address these issues.”
SOBERING EFFECT ON INVESTORS
Tesla’s $ 1.8 billion junk bond maturing in August 2025 plunged as much as 4 cents on the dollar to below 82 cents, a record low, in Friday trading, pushing the yield above 8.8 percent.
Coupled with an upfront cost of 21 percent of insured value, it now costs an investor around $ 280,000 to insure $ 1 million of Tesla debt for a year.
With Tesla’s stock falling to its lowest level since April, short sellers added 810,000 shares to their positions, bringing the total as of Thursday to about 32.6 million shares, according to S3 Partners, a financial technology and analytics firm.
Tesla has told investors it expects to turn a profit in the second half of this year, a forecast the company’s head of investor relations, Martin Viecha, reiterated at a conference earlier this week sponsored by RBC Capital Markets, RBC analyst Joseph Spak wrote in a note on Thursday.
Viecha also restated Tesla’s forecast that it will build 50,000 to 55,000 of its Model 3 sedans in the current quarter, and indicated the company’s working capital will improve as production increases, Spak wrote.
Prominent short-seller Andrew Left has sued Tesla and Musk, saying in his proposed class-action complaint on Thursday that Musk’s issuance of materially false and misleading information related to his abandoned plan harmed both short-sellers and those hoping the stock would rise.
Reporting by Nivedita Balu and Ismail Shakil in Bengaluru, additional reporting by Noel Randewich in San Francisco, Joe White in Detroit and Dan Burns in New York; Writing by Meredith Mazzilli; Editing by Matthew Lewis and Rosalba O’Brien
Whether you are looking to gain awareness, improve SEO, or increase sales, having great exposure can help you get there. But PR is not a band-aid for an overarching business problem–nor is it a get rich fast technique.
A great PR strategy can take many years to build. Over the years, I’ve seen many companies start their efforts, only to stop before they’ve given the program enough time to develop. I’ve heard dozens of marketers and founders explain that they quit their PR efforts after their pitch didn’t get picked up by enough outlets in the first few week. Gaining great coverage takes time, pitch optimization, and persistence.
Often times, if a brand could have taken a step back after a rejected story to tweak their angle and try again, the second story they pitch could have been widely successful. Here’s why you shouldn’t throw in the towel for your PR outreach just yet:
1. Relationships take time to build.
Imagine you are at a party. You immediately start talking about you, your business, and your news. Very quickly, many people will not want to talk with you.
The same holds true when you’re building relationships with the media. It takes time to get to know a reporter and what they are writing about and then creating relevant pitches that are helpful to them. When you build trust and rapport with reporters, they’ll be more likely to open your emails, which is the first step to gaining great coverage.
You can build a better relationship with reporters by becoming well versed with their past writings and looking for opportunities to tell them stories of interest. Take a look through their Twitter accounts and personal websites to learn more about what they’re covering and the news that is important to them.
When you reach out to a reporter for the first time, show them that you are knowledgeable about their area of coverage and that your story fits their angle. When we reach out to reporters we make sure to spend time reading their past work to ensure our pitch is the right fit for their area of expertise. It can be easy to burn a press bridge simply by not personalizing an email enough–take your time, do your research, and get to know reporters for the long term. Slow and steady wins the race.
2. SEO is a long-term game.
When you receive a press mention, you’ll likely see a spike in traffic on the day it’s published–but don’t discount the future traffic. If you are a mattress company and you get listed as “The Best Mattresses Ever Made,” you’ll benefit from both the spike and also later from people who are searching for mattresses and come across the article. Traffic from press articles should be monitored for months to come, even after publication.
An authoritative link will not only drive traffic, but will also help your website in the search engine rankings. This boost will not happen instantly. With time and relevant inbound links, you’ll see not just your referral traffic grow, but also your organic search traffic from Google.
3. Press takes commitment–and a bit of luck.
It takes a while to learn about the best way to pitch your product. Each time you pitch, you’ll learn more about what copy and message resonates with reporters.
If you’re not seeing any success, it does not mean you don’t have an interesting story. It might mean you are pitching to the wrong reporters, your email subject line needs work, or you simply didn’t follow up.
By tracking your emails with a tool like SideKick or Yesware, you’ll be better able to see who is opening your mails, what they’re clicking on, and how many times they went back to the email. You can use this data to refine your pitch the next time. With the media always changing, it also takes a bit of luck to pitch at the right time to the right reporter with the right story.
Pitching takes a strong backbone and you’ll get a lot of rejections. If you haven’t had success yet, keep trying. And if you’ve been pitching for months with still no results, it might be time to call in a PR pro to help you optimize your pitch and press kit.
If you’re looking to reap the benefits of the press, start early, optimize often, and plan your strategy for the long haul. This time next year, you’ll be glad you stuck with it.