Elon Musk is firing back against a recent Wall Street Journal report that alleged he has actively used illegal drugs and that his purported drug use is raising concerns among SpaceX and Tesla executives. Musk slammed the reporting as “false and defamatory” while also stating he would willingly undergo drug testing to disprove the claims.
Musk Calls Report “False and Defamatory”
The Wall Street Journal published an explosive report on January 7th citing interviews with dozens of SpaceX and Tesla executives, employees, and associates of Musk’s close circle of friends. The report alleged that Musk has actively used illegal drugs including ecstasy, cocaine, and LSD in recent years. Most disturbingly, some sources stated they had observed Musk using illegal drugs at private parties and work events.
Musk immediately took to Twitter to deny the allegations, calling the reporting “false and defamatory.” He also defiantly stated he would willingly undergo random drug testing to prove he has not used any illegal substances.
Drug Use Allegations Spark Board Reviews
According to the WSJ report, Musk’s supposed drug use and “erratic behavior” have alarmed SpaceX and Tesla board members to the point they have initiated secret reviews in recent months. While Musk is CEO of both companies, he does not control their boards.
The boards are said to be concerned that Musk’s behavior could impact operations, fundraising, and shareholder confidence. One source stated SpaceX president Gwynne Shotwell spearheaded efforts over the summer to address Musk’s reported drug use, while Tesla board chair Robyn Denholm initiated a separate review focused on executive oversight.
Tesla, SpaceX Share Prices Take a Hit
News of the board reviews and allegations against Musk saw Tesla’s share price drop 3.3% on Monday, wiping out over $15 billion in market capitalization. SpaceX is a private company, but secondary shares on the platform Forge Global were reportedly down 5%.
While Tesla has rebounded slightly, investors appear worried the drug use allegations and board scrutiny could further distract Musk at a time when Tesla faces growing competition. Musk’s $44 acquisition of Twitter, which he financed largely through Tesla share sales and commitments, has also been a lingering concern for investors.
| Company | Share Price Change | Market Capitalization Change |
|---|---|---|
| Tesla | -3.3% | -$15 billion |
| SpaceX | -5% (secondary shares) | Private company |
Musk Offers to Undergo Drug Testing
Seeking to disprove the allegations, Musk has offered to undergo random drug testing. In one Twitter post he said he would “gladly participate” if a random drug test was created, while in another he claimed he had not “taken any wild drugs” in years and there would be “no chance of passing” a test if he had.
A few hours later, Musk tweeted that he had already undergone random testing, stating “the results will speak for themselves.” He did not clarify who had performed the testing or when results could be expected.
If testing does indeed show Musk is not presently using illegal drugs, it may alleviate short-term concerns around his sobriety and judgment. However, the testing cannot discount claims that Musk has used drugs in recent years and exhibited concerning behavior tied to recreational use.
Musk’s Erratic Behavior Under Fire
In 2018, Musk infamously tweeted he had secured funding to take Tesla private at $420 per share, sparking an SEC investigation and his removal as board chair. According to the recent WSJ report, Tesla board members had concerns at the time that Musk may have been under the influence when he posted the market-moving tweet.
The report also examines other examples of Musk’s erratic behavior that have brought negative publicity. This includes a recent allegation that Musk exposed himself to an attendant on a private jet flight in 2016, his very-public personal life, outbursts against critics on Twitter, and more.
While Musk claims he works 120 hours per week and is simply under pressure, execs cited in the report worry his recreational drug use could be an underlying issue impacting his mood and decisions. However some close friends claim Musk can simply be eccentric without being under the influence.
What Comes Next?
Musk remains defiant, but the drug use allegations present a serious publicity crisis he will have to address. While he has offered to undergo testing, that alone may not satisfy the SpaceX and Tesla boards if they remain convinced his past behavior ties to illegal substance abuse.
The results of the board reviews could have major repercussions. Under a “Key Man” provision instituted when Musk takes loans using his Tesla shares as collateral, banks have the right to sell those shares if Musk engages in illegal conduct or is removed as CEO. Thus if the allegations impacted his standing as CEO, Musk could lose majority control of Tesla.
For now, Musk continues to firmly deny the claims against him while offering to definitively disprove them through random drug screening. Both Tesla and SpaceX operations remain continuing as usual. But until the veracity of the reports from dozens of sources are fully addressed, a cloud of uncertainty will remain.
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