Is Elon Musk Losing Investor And Employee Confidence?

Elon Musk's recent decisions, like closing Tesla stores to shift to a new online approach, got investors talking with the company's share coming under pressure. His leadership was also questioned after a recent survey highlighted the decline of employee confidence in him.

"To achieve these prices while remaining financially sustainable, Tesla is shifting sales worldwide to online only. You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide," a post on Tesla's blog announced the company’s bold move last week.

The post, published Feb. 28, shaved as much as $8 billion from Tesla's market capitalization as the stock price dropped by around 16 percent. Some investors expected the move just as much while others believe the sudden shift hinted financial trouble.

“We got the sense something was up because he is still competing against other auto manufacturers who have their costs screwed down, but at some point, his pricing is going to drop below theirs,” Cathie Wood, the CEO of ARK Invest, told Bloomberg. She did not share the surprise of other investors and remained bullish about Tesla.

It's not the same case for Alex Chalekian, the founder and CEO of Lake Avenue Financial in Pasadena, California.

“Tesla had been talking about expanding stores, and all of a sudden they are closing them. To me, this signals a huge financial concern and a possible cash-flow issue for Tesla," Chalekian said. He said that what happened is a 180-degree turn and as a result, his firm sold off the Tesla stock "held for advisory clients" on March 1.

Tesla employees are on the same page as Chalekian. A recent survey commissioned by Yahoo Finance through Blink suggests that about 44.26 percent or 104 people out of the 235 participants lost confidence in Musk's ability to lead. This is a decline from the result of a survey conducted two weeks earlier that showed 77.82 percent of Tesla and SpaceX employees believed that Musk was fit to lead.

The earlier study had 284 people and 221 of them saw Musk as just right for the leadership position. The second survey, done between Feb. 27 and March 4, showed a different story. The survey only asked participants to respond True or False to the following statement: “I am confident in Elon Musk’s ability to lead the company.” Participants didn't have a chance to explain their vote, and they were only allowed to vote once.