Wall Street Wary of Tesla's New 34-year-old CFO

Steph Willems
by Steph Willems
wall street wary of tesla s new 34 year old cfo

Tesla’s stock price took a tumble after CEO Elon Musk announced, at the end of a Thursday night earnings call, that Chief Financial Officer Deepak Ahuja was heading into retirement.

Ahuja joined Tesla in 2008, 15 years after first joining Ford and becoming CFO of its AutoAlliance joint venture with Mazda. He then served in an identical role for Ford’s southern Africa region. At Tesla, Ahuja returned to the CFO role after a two-year retirement hiatus from 2015 to 2017.

Ahuja’s successor doesn’t have quite as lengthy a CV to draw from. Twenty-two years younger than his predecessor and just six years out of business school, Zach Kirkhorn’s rise to the CFO spot has some analysts rattled.

Kirkhorn, 34, joined Tesla nine years ago and serves as the company’s VP of finance. While a business school degree is something you’d want to see in a chief financial officer’s past, Kirkhorn’s past does not contain experience in the CFO chair.

Tesla’s stock fell nearly four percent in early Thursday trading, rebounding to just below Wednesday’s close by afternoon.

As reported by CNBC, the loss of Ahuja is seen by many as a threat to the company’s stability, despite the automaker’s two consecutive quarters of profitability and the ironing out of production hurdles on the Model 3 line. No shortage of braintrust has left the company as of late, especially in the past year.

AB Bernstein wrote, “We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO, just six years removed from business school.”

Goldman Sachs is of a similar mind, telling investors, “We believe the changeover may cause some uncertainty for investors as Tesla just saw two consecutive quarters of profitability and positive cash flow, and we see potential for a less stable path forward due to a sequential step-down in deliveries, working capital headwinds and convertible debt payment.”

J.P. Morgan Chase expects “investors to react negatively to the replacement of Deepak Ahuja,” while Barclays holds a pessimistic outlook for the stock, citing Kirkhorn’s lack of experience.

Deutsche Bank doesn’t think much of Ahuja’s departure, calling his retirement “unremarkable.” While the automaker faces flattening production in America, an influx of vehicles to Europe and China bodes well for the future, the bank said.

While Kirkhorn will hold the reins once Ahuja departs in the coming months, his predecessor apparently isn’t disappearing to a desert island. In his earnings call, Musk said the retiring CFO will be held on as an advisor.

[Image: LinkedIn]

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  • Hondah35 Hondah35 on Jan 31, 2019

    If I were this guy I would run quickly in the other direction. He has bagholder written all over him.

  • NN NN on Feb 01, 2019

    Similar to how Kushner is Trumps highest trusted advisor, and is behind a lot of policy decisions affecting us all.

    • Xtoyota Xtoyota on Feb 01, 2019

      That didn't take long for POLITICS to get involved :=(

  • SCE to AUX A question nobody asks is how Tesla sells so many EVs without charge-at-home incentives.Here are some options for you:[list][*]Tesla drivers don't charge at home; they just squat at Superchargers.[/*][*]Tesla drivers are rich, so they just pay for a $2000 charger installation with the loose change in their pocket.[/*][*]Tesla drivers don't actually drive their cars much; they plug into 110V and only manage about 32 miles/day.[/*][/list]
  • SCE to AUX "Despite the EV segment having enjoyed steady growth over the past several years, sales volumes have remained flatter through 2023."Not so. How can EV sales be increasing and flatter at the same time?https://insideevs.com/news/667516/us-electric-car-sales-2023q1/Tesla and H/K/G are all up for EV sales, as are several other brands.
  • ToolGuy Here is an interesting graphic, if you're into that sort of thing.
  • ToolGuy Nice website you got there (even the glitches have glitches)
  • Namesakeone Actually, per the IIHS ratings, "Acceptable" is second best, not second worst. The ratings are "Good," "Acceptable," "Marginal" and "Poor."
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