Musk Says He Was ‘Foolish’ Dealing With Probing Tesla AnalystsBy
CEO tweets that analysts’ queries were ‘absurd,’ ‘boneheaded’
Accuses RBC, Bernstein analysts of representing bearish thesis
Musk tweeted that analysts at Sanford C. Bernstein & Co. and RBC Capital Markets were representing “a short seller thesis, not investors” when posing questions he cut off during the Wednesday call. The chief executive officer reiterated that an inquiry about capital expenditures by Bernstein’s Toni Sacconaghi was “boneheaded” and said RBC’s Joseph Spak posed an “absurd” query about Model 3 reservations.
“Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time,” Musk wrote, referencing devices he sold earlier this year to raise money for his tunnel-digging company Boring Co.
The tweets are the latest episode to suggest that the billionaire CEO fixates on investors’ bets against Tesla, a company that hasn’t earned an annual profit in its 15-year history. A Rolling Stone cover story in November described a scene in which Musk shared information about short-sellers’ Tesla positions to his sons. He trolled bears in April 2017, tweeting “Stormy weather in Shortville...” after Tesla surpassed Ford Motor Co. in market value.
Tesla shares rose 1.5 percent as of 1:15 p.m. Friday in New York, recouping some of the losses from Musk’s behavior on the company’s earnings call, which sent the stock down by the most in more than a month.
After receiving a suggestion on Twitter that blocking analysts who are going to be negative would solve his problem, Musk wrote back: “True. And once they were on the call, I should have answered their questions live. It was foolish of me to ignore them.”
Musk, 46, rejected Sacconaghi and Spak’s questions during the Wednesday call to discuss another quarter in which Tesla burned more than $1 billion in cash. The CEO said questions he was getting were “so dry” and told the conference-call operator to pivot instead to inquiries from a YouTube channel owner who said he was representing retail investors.
Bernstein’s Sacconaghi and RBC’s Spak both rate Tesla shares the equivalent of hold.
“There is incremental concern when, on an analyst financial quarterly call, the CEO doesn’t appear to want to talk about important financial metrics,” Sacconaghi said Thursday on Bloomberg Television. “The read-through is that potentially the CEO doesn’t care or isn’t focused about those financial metrics or ultimately the numbers don’t tell a good story. But either of those interpretations are not particularly comforting.”
Sacconaghi has a $265 price target on the stock, while Spak’s is $280.
The news that Tesla released in its earnings report was “actually super good,” Musk said in another tweet. The company’s Model S and Model X vehicles “are producing major positive cash flow & Model 3 is about to do same,” he said.
Recommendations on Tesla shares are close to evenly split among the 30 analysts tracked by Bloomberg, with 10 buys, 11 holds and nine sells. Morgan Stanley’s Adam Jonas wrote in a report to clients that the earnings call may have been the most unusual in his 20 years as an analyst.
“Is he unhinged? And is our capital secure with Tesla? That’s the question people have,” James Albertine, a Consumer Edge Research analyst with a buy rating on the shares, said Thursday in a Bloomberg Television interview. “It’s something that I think is worthy of a mea culpa moment. We’re hopeful that he gets the message from his team and maybe we see that soon.”
— With assistance by Brandon Kochkodin, Phil Serafino, Tara Patel, and Anthony Palazzo