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Tesla Hits 9-Month Low as Governance Problems Stoke Concerns Over Musk

Published 05/20/2022, 11:08 PM
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By Geoffrey Smith 

Investing.com -- Tesla (NASDAQ:TSLA) stock slid to its lowest in nine months on Friday as CEO Elon Musk's ongoing spat with media took a turn for the worse. 

Tesla stock fell as much as 5.3% to $671.54 by 11 AM ET (1500 GMT) and is now down some 46% from its October high. However, it's still risen 18-fold since 2019 and continues to trade at valuations that few if any stocks have sustained over long periods of time. 

Musk responded angrily via Twitter overnight to a report by Business Insider, which revived historical allegations of sexual harassment against him by an employee of SpaceX, Musk's second-most valuable venture. 

BI reported that SpaceX had paid $250,000 to settle the allegations. Musk tweeted on Friday that the "wild accusations" against him are "completely untrue", and part of a left-wing agenda to discredit him and force him to abandon his bid to buy Twitter (NYSE:TWTR). 

"Their only goal was a hit price to interfere with the Twitter acquisition. The story was written before they even talked to me," Musk said. 

The BI story came in the same week that S&P Global dropped Tesla from a benchmark ESG-themed index due to repeated incidents of racial discrimination at the carmaker's factories.

Owen Diaz, who worked at the plant for nine months in 2015 and 2016, said other employees used racist slurs when speaking to him, and scrawled swastikas and slurs including the "N-word" on bathroom walls.  

Tesla has been arguably the most prominent environmentally-themed stock anywhere in the world for the last decade, attracting billions of dollars from investors who have bought into its mission to cut vehicle carbon emissions. However, its failings on the other two pillars of the ESG platform - social and governance issues - have left it vulnerable to being excluded from indices which now manage trillions of dollars. 

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