Tesla Inc. is widely expected to report its sixth consecutive quarterly profit Wednesday -- and potentially its first $1-billion quarter. That follows a remarkable year when Tesla’s stock split and skyrocketed, the company joined the S&P 500 Index and it sold almost half a million cars.
Two years ago, the world’s leading electric vehicle maker was going through a rough patch. Elon Musk, Tesla’s CEO, informed employees in a January 2019 open letter that the company had to reduce headcount by 7 percent and boost Model 3 production rates to survive. Later that month, the CEO told analysts Tesla needed to cut costs and its vehicle prices to avoid bankruptcy.
And there was one more thing. As the earnings call drew to a close, Musk dropped a bombshell: Deepak Ahuja, the longtime finance chief who previously worked at Ford Motor Co., was retiring again. A then-unknown protégé from the finance team, Zachary Kirkhorn, would replace him after a short transition period.
Investors worried: Was Ahuja’s departure another sign of turmoil and executive talent running for the exits? Tesla’s PR team at the time didn’t have a basic bio or photograph of Kirkhorn at the ready. The surprise announcement sent shares tumbling.
Kirkhorn, 36, remains a bit of a mystery to the average investor, but he has made his mark. He has shored up Tesla’s balance sheet with a string of successful capital raises, introduced a more conservative approach to forecasting and provided greater discipline in cost-cutting that has helped Tesla act more like the S&P 500 company it has become.
“People still don’t really know who Zach is, but they know what he’s done,” said Gene Munster, managing partner at Loup Ventures. “He’s a shy person, and I don’t think he likes to speak publicly. But it’s been a remarkable turnaround.”
Though he participates in all of Tesla’s earnings calls, he’s not a conference-goer. Several sell-side analysts said they’ve never talked with him on the phone. Tesla executives did not respond to an email about this story.
But the numbers speak for themselves. By the yardsticks that measure most CFOs, he has excelled. Tesla shares have risen more than 1,300 percent during his tenure. On the day Musk announced that Kirkhorn would be taking over -- Jan. 30, 2019 -- Tesla’s market capitalization was $53 billion. It was about $835 billion at Monday’s close. At this pace, a trillion-dollar valuation may not be far off.
Tesla shares closed Tuesday's trading up a fraction to $883.09.