Elon Musk Defends Unusual Conference Call

Published on: 04 May, 2018

After a strange and unusual conference call on Wednesday, Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk went to Twitter early Friday morning to defend his responses to analysts.

Musk said that the questions asked by analysts represented short sellers and not actual investors, which is why he was more interested in answering HyperChange, a small YouTube channel that covers financial investments.

"We have no interest in satisfying the desires of day traders. I couldn't care less. Please sell our stock and don't buy it." Musk said to Baird analyst Ben Kallo in the earnings call.

“The “dry” questions were not asked by investors, but rather by two sell-side analysts who were trying to justify their Tesla short thesis. They are actually on the *opposite* side of investors. HyperChange represented actual investors, so I switched to them.” Musk tweeted on Friday.

According to data compiled by Thomson Reuters, the analysts that Musk interrupted, RBC Capital Markets analyst Joseph Spak and Bernstein analyst Toni Sacconaghi have a “hold” or equivalent rating on Tesla’s stock. Both have a three-star out of a five star for accuracy on their coverage of the company.

“The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors” said Musk.

Sacconaghi has a price target of $265 on Tesla’s stock and Spak lowered his price target from $305 to $280 on Thursday. Wall Street’s price target consensus is $317.

Sacconaghi asked about the capital expenditures, in which Musk responded by saying:  “Excuse me. Next. Boring, bonehead questions are not cool. Next?”

Musk then tweeted on Friday regarding Sacconaghi question:  “The reason the Bernstein question about CapEx was boneheaded was that it had already been answered in the headline of the Q1 newsletter he received beforehand, along with details in the body of the letter”

Spak asked Musk about Model 3 reservations and how many customers were configuring their vehicles, in which Musk responded by saying: “We’re going to go to Youtube [HyperChange]. Sorry. These questions are so dry. They’re killing me.”

Musk said that Spak’s question was absurd because Tesla has roughly half a million reservations .

“Reason RBC question about Model 3 demand is absurd is that Tesla has roughly half a million reservations, despite no advertising & no cars in showrooms. Even after reaching 5k/week production, it would take 2 years just to satisfy existing demand even if new sales dropped to 0.”

Sacconaghi said on Thursday on CNBC that the conference call was a “financial analyst call, this is not a TED talk.”

Morgan Stanley's Adam Jonas wrote in a note to clients that Tesla’s conference call was “arguably the most unusual call I have experience in 20 years on the sell-side.”

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Danny Abramov

Email: danny@financialinsiders.com

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