The senior associate dean at the Yale School of Management called Tesla’s recent first-quarter loss “catastrophic” and pointed the blame at Tesla CEO Elon Musk.
CNBC reports that Jeffrey Sonnenfeld, a senior associate dean at the Yale School of Management, didn’t hold back when discussing Tesla’s first-quarters earnings report. “When is the board going to wake up?” asked Sonnenfeld, “You know what they are? They do understand cruise control better than anybody else. The board is on ‘cruise control.'” This was an obvious reference to Tesla’s autopilot feature which the company has claimed will allow cars to drive themselves, a claim which has been repeatedly questioned.
Based on average estimates compiled by Refinitiv, here’s what Tesla reported versus what analysts expected:
- Loss per share on an adjusted basis: $2.90 versus 69 cents expected
- Revenue: $4.54 billion versus $5.19 billion expected
Although Tesla’s sale of vehicles rose by 36 percent to $3.72 billion from $2.74 billion a year ago, it still represented a 41 percent drop from the fourth quarter. Tesla appeared aware of this warning investors that first-quarter income would “be negatively impacted” due to “lower than expected delivery volumes and several pricing adjustments.”
Sonnenfeld, who has decades of experience studying CEO leadership and corporate governance was, however, not impressed. According to Sonnefeld, Tesla’s first-quarter figures were the “worst disaster” in the technology sector that “a lot of us can remember in a long time.”
Sonnefeld stated that it wasn’t just that Musk has “dramatically failed in expectations but it’s that he set these expectations himself.” Sonnenfeld noted that Tesla’s stock is not trading “anywhere near $420,” a reference to the price point that Musk said he would take Tesla private at in a tweet on August 7, 2018, which resulted in a severe fine from the SEC.
Sonnefeld also referred to Musk’s predictions that 1 million Tesla robotaxis with no human drivers would be available on the U.S. market next year, calling this claim “ludicrous.”