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Why it might be time for Elon Musk to step down from Tesla

Category: Automobile,Finance

Short seller: Replacing Elon Musk might be good for Tesla

A prominent short seller who is suing Tesla and Elon Musk for manipulating its stock price says the company would be better off without Musk as the CEO.

Andrew Left, the founder of Citron Research, told CNN's Julia Chatterley on "First Move" Tuesday morning that it might make sense for Musk to have a more strategic or visionary role at Tesla (TSLA). He said the company could bring in someone else to run the day to day operations.

Left said it would have seemed like "death to the company" a few months ago to think Tesla might need someone else to run it. But Musk has courted controversy as of late. Recently Musk has smoked marijuana during a video interview and accused a caver in the Thai rescue of a stranded soccer team of being a pedophile.

Last week, Left filed a class action lawsuit that accuses Musk of securities fraud after he tweeted in August that he had "funding secured" for a plan to take Tesla private at $420 a share. Musk has since abandoned the plan.

Left argued that the tweet was an attempt to "burn" short sellers who are betting against the company.

"Musk has a long-standing public feud with short-sellers and often uses his personal Twitter account to taunt and confront skeptics of his company," Left noted in the lawsuit.

On Tuesday, Left conceded that his short position on Tesla has been wrong so far. The stock, despite recent volatility, has soared over the past few years.

"Rumors of their death have been greatly exaggerated and talked about many times," Left said,

But Left told Chatterley he thinks that at the end of the day, Tesla is going to need more cash and it will probably have to sell more stock to raise funding.

That would be bad news for existing shareholders. Shares fell 2% Tuesday and are now down more than 20% in the past month.

CNNMoney (New York) First published September 11, 2018: 11:54 AM ET


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