Tuesday, 22 May, 2018

Tesla CEO Elon Musk doubles down on 'bonehead' remark

Elon Musk isn't backing down despite weird remarks in Tesla call Musk defends cutting off 'short seller thesis' analysts
| 06 May, 2018, 00:10

Some on Wall Street were puzzled by what they called Musk's "unusual" performance on his latest earnings call, but he did share a few details about Tesla's planned autonomous vehicle network.

Musk opted to explain his side on Twitter early Friday.

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The spat comes at a crunch time for Tesla when it is struggling to ramp up production of its Model 3 sedan, on which its profitability depends.

Tesla shares are up 1.1% in Friday trading but off 3.3% over the past 12 months, while the S&P 500 has gained 10%.

Bernstein's Sacconaghi and RBC's Spak both rate Tesla shares the equivalent of hold.

Musk's antics on the weird call pushed the electric vehicle maker's shares down on Thursday, with several analysts making scathing comments and at least three brokerages cutting price targets on the stock.


"Let's just say that Elon's behaviour 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". The EV maker claims it doesn't need to raise more funds for capital expenditures.

"First it's important to know that Tesla is the most shorted (meaning most bet against) stock on the market & has been for a while", tweeted Musk.

On Thursday, Sacconaghi sharply criticised Musk on CNBC: "This is a financial analyst call, this is not a TED talk".

The outspoken CEO spent the following 20 minutes speaking with Galileo Russell, a retail investor and host of the YouTube channel HyperChance TV, who convinced Musk on Twitter to allow him on the call despite it being reserved for analysts, investors, and the media. Musk interrupted the analyst and dismissed his question, indicating that "boring" questions are "not cool".

As for whether this is the last of Musk's odd behavior, that seems unlikely. The freakish call yielded scathing comments from analysts and at least three brokerages cut price targets on the stock.

Sacconaghi has a price target of $265 on Tesla's stock and Spak lowered his target to $280 from $305 on Thursday. "We wonder what spending is deferred and for how long", CFRA analyst Efraim Levy wrote in a note to investors.

The results exceeded Wall Street expectations.

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