Tesla CFO resignation is a major blow
CFO Zachary Kirkhorn tendered his resignation last week after 13 years with the company. He has been CFO for the past 4 years.
No reason was given. His successor Vaibhav Taneja will take over. He will stay with the company through the end of the year to support the transition.
Since Kirkhorn's promotion to CFO in early 2019, he had made major contributions. Tesla has seen a notable financial upswing, repaying nearly USD10 b in debt over 3 years. Data from Bloomberg indicates a significant rise in free cash flow during his tenure as CFO.
Musk has admitted that his company came close to bankruptcy at points between 2017 and 2019, when Mr Kirkhorn took on the role of finance chief.
Tesla’s business began soaring soon. The cash-burning electric carmaker turned a profit for the first time in the second quarter of 2020 and has been consistently profitable under Musk’s and Kirkhorn’s leadership.
Tesla’s business began soaring soon. The cash-burning electric carmaker turned a profit for the first time in the second quarter of 2020 and has been consistently profitable under Musk’s and Kirkhorn’s leadership.
Tesla’s valuation grew from USD50 b to USD773 b while Zach Kirkhorn was CFO.
Somebody compared Kirkhorn's resignation to XPeng's Vice President of Autonomous Driving's resignation.
1) Kirkhorn tendered his resignation last week while Wu Xinzhou tendered last year. So he had plenty of time to groom Li Liyun.
2) Wu's successor was formerly in charge of XNGP - XPeng's Advanced Driver- Assistance System (ADAS), so was a capable replacement. Kirkhorn's successor, Taneja, is a greenhorn in the CFO role.
3) Kirkhorn helped to prevent Tesla from bankruptcy, grew its profits tremendously and maintained its profitability. Taneja has no such experience.
So Kirkhorn's resignation is a big loss to Tesla, but Wu's resignation has little effect on XPeng.
Kirkhorn short tenure of 4 years as CFO has raised questions.
Here are three of the theories circulating that might explain Kirkhorn’s exit.
The heavy lifting at Tesla has been done
This would be the most positive spin on Kirkhorn’s move.
Kirkhorn helped grow Tesla's market cap from USS50 b to USD773 b. Before he became CFO, Tesla had a long history of losses and occasionally burned more than USD1 b of cash per quarter. With Kirkhorn as finance chief, Tesla has experienced profitability and repaid about USD10 b of debt in the past 3 years, which has helped secure investment-grade ratings.
The heavy lifting at Tesla has been done by Kirkhorn.
Elon doesn’t do lengthy goodbyes
An adjacent theory is that Kirkhorn, who the Wall Street Journal reported was a successor candidate to CEO, got the message that the boss didn’t have plans to move on anytime soon, in which case he could have been stuck as a CEO-in-waiting indefinitely.
Gary Black, managing partner of the Future Fund, had some interesting points about the timing and wording of the announcement, which he posted in a thread on X.
“My read on Zach’s resignation: Tesla has made him very wealthy and Zach likely told Elon it was time for him to move on and suggested he leave at year-end. Elon likely asked him to reconsider, Zach reconsidered and told him he still wanted to leave, Elon took it badly and said let’s make it effective immediately,” Black theorized.
“My read on Zach’s resignation: Tesla has made him very wealthy and Zach likely told Elon it was time for him to move on and suggested he leave at year-end. Elon likely asked him to reconsider, Zach reconsidered and told him he still wanted to leave, Elon took it badly and said let’s make it effective immediately,” Black theorized.
Kirkhorn and Musk had some sort of fundamental disagreement
A third theory is that Kirkhorn and the famously colourful Musk had some sort of disagreement.
“The oddest aspect of Zach’s resignation is the timing - effective immediately,” Black wrote on X. “Most amicable resignations where a top exec has been at a firm for 10 or more years have a transition period (one to two quarters) where the person steps down at the end of the transition.
He continues, “Nowhere in the 8-K or Zach’s LinkedIn post does it say Zach resigned. That opens the door to the question: Was Zach fired, or did he disagree with Elon on some aspect of strategy (price cuts/margins) or succession (maybe Zach was told he was not a CEO contender)?"
But Dan Ives, a tech analyst at Wedbush Securities, thinks this isn’t the last we’ll see of Kirkhorn: He’ll be “a CEO somewhere else in 2024,” he predicted.
Sources:
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Silverbat : Crack!
skywalker74 : too many speculations fr you. corporate staff resignations are part and parcel of corporate life. tesla will still be a mega and leading organisation in the technology and EV industry. fact.
skywalker74 : how much have u short tesla and what price will u want to buy back the shares? tesla share price is going up soon. reap your profits before it's gone
DreamyLucid : Leadership change is normal. Not going to impact anything much.
Nickz_AI : Copy paste from google.. We people dont buy or sell based on comments
bullrider_21OP skywalker74: I don't short Tesla. I'm someone who wants to know the truth - whether good or bad.
bullrider_21OP DreamyLucid: The circumstances around the change are not normal.
bullrider_21OP Nickz_AI: Those are not normal people's comments. Those are articles from Barrons, Fortune and Wall Street Journal - reputable news sources. Did you even read the articles?
Nickz_AI : Yes we read.. rise n fall nature of stocks! Njoy trading
bullrider_21OP Nickz_AI: You too