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

wall street wary of teslas 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 :=(

  • Dennis Howerton Nice article, Cory. Makes me wish I had bought Festivas when they were being produced. Kia made them until the line was discontinued, but Kia evidently used some of the technology to make the Rio. Pictures of the interior look a lot like my Rio's interior, and the 1.5 liter engine is from Mazda while Ford made the automatic transmission in the used 2002 Rio I've been driving since 2006. I might add the Rio is also an excellent subcompact people mover.
  • Sgeffe Bronco looks with JLR “reliability!”What’s not to like?!
  • FreedMike Back in the '70s, the one thing keeping consumers from buying more Datsuns was styling - these guys were bringing over some of the ugliest product imaginable. Remember the F10? As hard as I try to blot that rolling aberration from my memory, it comes back. So the name change to Nissan made sense, and happened right as they started bringing over good-looking product (like the Maxima that will be featured in this series). They made a pretty clean break.
  • Flowerplough Liability - Autonomous vehicles must be programmed to make life-ending decisions, and who wants to risk that? Hit the moose or dive into the steep grassy ditch? Ram the sudden pile up that is occurring mere feet in front of the bumper or scan the oncoming lane and swing left? Ram the rogue machine that suddenly swung into my lane, head on, or hop up onto the sidewalk and maybe bump a pedestrian? With no driver involved, Ford/Volkswagen or GM or whomever will bear full responsibility and, in America, be ambulance-chaser sued into bankruptcy and extinction in well under a decade. Or maybe the yuge corporations will get special, good-faith, immunity laws, nation-wide? Yeah, that's the ticket.
  • FreedMike It's not that consumers wouldn't want this tech in theory - I think they would. Honestly, the idea of a car that can take over the truly tedious driving stuff that drives me bonkers - like sitting in traffic - appeals to me. But there's no way I'd put my property and my life in the hands of tech that's clearly not ready for prime time, and neither would the majority of other drivers. If they want this tech to sell, they need to get it right.