Tesla Stock Reverses Amid Executive Exodus (TSLA)
A Small But Glaring Error and Trend
Last Week, Tesla announced that Michael Zanoni, Executive VP of Finance and Worldwide Controller, had left the company to go back to Amazon.com, Inc. (AMZN), where he worked until 2014. Prior to Amazon, Zanoni also worked at The Boeing Company (BA).
Earlier this month, Tesla admitted the mistake via an 8-K filing.
“An immaterial error that overstated the cost and resulting net book value of the Supercharger network was included in Tesla Motors, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “Form 10-K”),” read the filing. “In Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation-Management Opportunities, Challenges and Risks-Trends in Cash Flow, Capital Expenditures and Operating Expenses, the net book value of the Supercharger network as of December 31, 2015 should have been stated as $166.6 million.”
Jason Wheeler, the CFO for less than a year, replaced long-time CFO Deepak Ahuja last year after Ahuja also abruptly left the company.
The Bottom Line
While the company’s reference to “an immaterial error” in the 8-K filing may play down the inaccuracy in the 10-K filing, it still opens up Tesla to future criticism and potentially more scrutiny given the lack of stability in Tesla’s finance department. Can TSLA stock still deliver in 2016? The shares have a consensus hold rating and an average analyst 12-month price target of $213.50, implying a 6% decline from Thursday’s close of $227.75.
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