Execs Head for the Exits
In the meantime, Tesla reported today that its chief accounting officer, Dave Morton, submitted his resignation as of Tuesday as a result of the public scrutiny the company faced in the past month.
“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations,” Morton said in the statement. “This caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla’s leadership or its financial reporting.”
Furthermore, Tesla’s human resources chief Gaby Toledano, is not returning from a leave of absence after the company was racked with possible SEC probes after Musk’s tweet to go private. Vice president of communications Sarah O’Brien is also leaving as part of a planned departure.
Shares of Tesla have already plunged over 20% within the past month as the company is struggling to secure alternate sources of funding as it continues to burn through cash.
High Yield in Favor
With prices of Tesla bonds falling, it presents a buying opportunity for risk-on investors looking for high-yield options. According to CNBC, the extended bull market has caused high yield debt issues to be in favor, such as the iShares iBoxx High Yield Corporate Bond ETF (NYSEArca: HYG), which ranked second among all ETFs currently as far as inflows from new investors with almost $3 billion.
In August, HYG ranked seventh among all ETFs for monthly flows with a total of almost $1.4 billion. HYG tracks the investment results of the Markit iBoxx® USD Liquid High Yield Index, which is comprised of high yield U.S. corporate bonds that have less than investment-grade quality. Investors who have been able to forego the credit risk have seen total returns of 3.95% the last three years and 1.22% the past year based on Yahoo! Finance performance figures.
For more news and strategy, visit our current affairs category.