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In the first week of September 2018, electric vehicle major Tesla was rocked by a series of unusual events that culminated in a not-so-happy ending for the pioneering carmaker. First, a couple of C-suite executives announced their resignations. Second, a video surfaced online showing CEO Elon Musk smoking marijuana while recording a podcast. Tesla’s stock took a massive beating and plunged over 11% within a week.
Less than two months later, however, a more positive incident went largely unnoticed. The company turned its first profit in two years, riding on the Model 3’s popularity. Tesla made $311 million, more than in any other quarter in the company’s history. In reaction to this news, Tesla’s stock soared over 9% on a single day. The genesis of this second event was Musk’s announcement in April 2018 that he would manufacture Model 3 cars round the clock to meet the company’s production target.
This article is authored by Rajiv Jayaraman & Subramanian Kalpathi.