When one of the most valuable companies in the world loses its CFO out of the blue, people are bound to talk, especially if the resignation is devoid of the usual flowery language that often accompanies such departures and aims to bestow a sheen of amity to what is usually an acrimonious affair. It is hardly surprising, therefore, that the abrupt resignation of Tesla’s CFO has now set the tongues wagging.
In a tersely worded statement released just moments ago, Tesla disclosed that Zachary Kirkhorn has stepped down as the company’s CFO and would now be replaced by Tesla’s Chief Accounting Officer (CAO), Vaibhav Taneja. Kirkhorn will remain associated with Tesla through the end of 2023 to ensure a seamless transition.
Also, notice how the $TSLA filing did not say anything like "Mr. Kirkhorn's departure is not due to any disagreements with the company" or something like that - something we often see when board members or executives leave?
— funwithnumberz (@funwithnumberz) August 7, 2023
While Tesla did thank Kirkhorn for his contributions, notice the statement’s refusal to stress the absence of any disagreements, a veritable rite of passage when it comes to amicable corporate departures.
This is now fueling a fresh round of speculation. After all, it was Kirkhorn who had predicted toward the start of the year that Tesla’s automotive gross margin (AGM), excluding leases and credits, would remain at 20 percent. However, following successive rounds of aggressive price cuts, Tesla’s AGM declined to 18.1 percent in Q2 2023 and is slated to fall further as Elon Musk continues to show a willingness to sacrifice profit margins to drive volume growth, banking on the eventual solution to the FSD conundrum to drive much higher profits in the long run.
So $TSLA is about to solve FSD, with the stock about to become the most valuable on earth, and the CFO steps down?
Very odd. Also not good for Elon if ZK decides to flip and head to the SEC. I'm sure he would have plenty to spill if he wanted to.
— funwithnumberz (@funwithnumberz) August 7, 2023
Zachary Kirkhorn’s departure also sheds a troubling light on the litany of FSD-related investigations that Tesla now finds itself embroiled in. The EV giant is currently being investigated by California’s DMV and the office of the attorney general. It is also under the scrutiny of the SEC and the Department of Justice. To make matters worse, the US Office of Defects Investigation (ODI) has also now opened a preliminary evaluation of Tesla’s 2023 Model 3 and Model Y, citing 12 reports of inability to steer the vehicle and loss of power steering.
At the time of writing, Tesla shares are down over 2 percent, casting a pall over the Nasdaq 100 index.
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