Commentary

Musk Rages About Analysts, Journalists In 'Bizarre' Earnings Call

Elon Musk, who has never been prone to following the Google Map route for corporate direction, went way off road on the investor relations journey, calling one analyst’s question on Tesla’s Q1 2018 earnings call on Wednesday “boring, boneheaded” and telling day traders to take their money elsewhere.

“The strange call quickly overshadowed Tesla’s decent results, sending the stock careening lower. Tesla tumbled 5.6% on Thursday,” writes Matt Egan for CNN Money.

“‘I've never heard a call like that,’ Jeffrey Osborne, a Cowen analyst who has been in research for 20 years, tells Egan. ‘I've heard people tap-dance around questions. But to berate people and call them ‘bonehead.’ That was a first for me.’”

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Egan suggests that, as time passes, Musk’s performance may be written off as “the antics of a visionary founder with a successful track record” but it’s coming at a time when the company is facing several tough challenges, including production problems with the Tesla 3.

“‘Let’s just say that Elon’s behavior on the call should give even the uberbulls pause,’ wrote Brian Johnson, an analyst who covers Tesla at Barclays Capital, who described the conference call as ‘downright bizarre,’” reports Matt Phillips for the New York Times.

“Conference calls after earnings reports are released tend to be clubby affairs where analysts gently probe executives for details they can use to adjust their profit and revenue estimates up and down for coming quarters. But Tesla’s call on Wednesday contained considerable fireworks,” Phillips points out.

“Musk's behavior … raises questions about Musk's relationship with the investors who have bought equity from the company year after year, including those who think Tesla may need to return to markets in the not-so-distant future,” writes Robert Ferris for CNBC.

“Musk insisted on the call that he has no plans to raise capital at this point, and Tesla was not available for further comment. But many on Wall Street say that insistence does not seem to square with what they see in Tesla’s finances,” Ferris continues.

He “refused to answer questions from analysts on Tesla’s capital requirements, saying ‘boring questions are not cool.’ Instead, he took over a dozen consecutive questions from YouTube investment channel HyperChange TV, which had previously recommended buying Tesla shares, Reuters’ Supantha Mukherjee writes, pointing out that Musk also chatted about “barnacles, flufferbots, and bonehead bears.”

Seeking Alpha has a transcript of the earnings call.

CNBC’s “Mad Money” host Jim Cramer had a contrarian opinion, as is his wont. “Last night was absolutely, hands-down Musk's best conference call, ever. By far,” he claimed.

“Cramer particularly liked Musk's jab at the short-sellers piling into the automaker's stock: ‘We have no interest in satisfying the desires of day traders. I couldn't care less. Please sell our stock, don't buy it,’” reports CNBC’s Elizabeth Gurdus. 

“‘Tesla's stock is unnerving, not for the faint of heart. I sure don't like it,’ Cramer said. ‘I think people don't understand the risks that are associated with it and how emotional it can be.’”

And it’s not as if Musk has ever been a predictable suit.

“Tesla CEO Elon Musk is a polarizing figure, a billionaire entrepreneur who can incite immediate and divergent reactions with a single tweet. His actions during Tesla’s first-quarter earnings call Wednesday were deemed both unhinged and brilliant, spurious and authentic, cagey and candid,” writes Kirsten Korosec for Fortune in compiling some of his “most interesting” comments. 

Journalists were not spared:

“If it’s an autonomous situation, it’s headline news, and the media fails to mention that — actually they shouldn’t really be writing the story, they should be writing the story about how autonomous cars are really safe. But that’s not the story that people want to click on….,” Musk said. 

“So they write inflammatory headlines that are fundamentally misleading to the readers. It’s really outrageous. And this will be true, even if electric cars were — sorry, if autonomous cars were — 10 times safer. So if instead of a 1 million deaths you had 100,000 deaths….”

George Schultze, whose bio for Forbes states “I wrote the book on vulture capital,” opines: “The company’s incessant need to finance operations through repeated capital markets financings may have been impaired by the CEO’s smug shutdown of analysts’ questions. Whether or not, the equity market is certainly concerned about this as evidenced by the stock sell-off. Going forward, Tesla is looking eerily similar to many other businesses that ultimately failed due to excessive debt while the CEO was simultaneously bad-mouthing analysts who just wanted more transparency.”

Apparently there’s speaking your mind. Then there’s transparency.

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