Musk defends Tesla conference call snub of analysts

Sean Reid
May 6, 2018

At one point Musk even told one analyst: "We have no interest in satisfying the desires of day traders".

Musk, 46, rejected analysts' questions during the Wednesday call to discuss another quarter in which Tesla burned more than US$1 billion in cash.

Musk's refusal to answer "boring" Wall Street questions about finances sent the electric vehicle maker's shares down as much as 7 percent on Thursday. First, Musk stated that the two analysts he opted to ignore were attempting to justify their Tesla short thesis.

Musk then gives several reasons for his unusual outbursts during the call, explaining the two people who asked questions weren't investors but analysts who "represent a short seller thesis", or people who back a strategy that bets against Tesla.

Tesla's stock dropped more than 5% on Thursday after Musk, speaking after the electric vehicle maker reported stronger revenue than expected, dismissed two questions about Model 3 orders and reduced spending plans.

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. "It was foolish of me to ignore them", Musk wrote in a tweet Friday morning addressing the call. This means that some are betting Tesla's shares will fall, and they stand to gain if the share price drops.

Although Musk has insisted the company neither needs nor wants new funding, many believe the company will seek to raise more capital by the end of 2018.

When a Twitter user suggested that Musk could have blocked the analysts from speaking on the conference call, the Tesla founder responded, "True". Musk called the questions "dry" and "not cool".

The Model Y will be the new entry level model of Tesla after its launch and it is based on the same platform of Model 3. "They are actually on the *opposite* side of investors", Musk tweeted. If his account checks out, it's not hard to see why Musk would be annoyed. Not all long shares are in stock-lending programs, and given the high short interest at the moment, that leaves just 6.5 million shares for expanded short positions.

Next, Musk was asked many questions by Galileo Russell, a 25-year-old retail investor, and owner of a YouTube Channel.

Sacconaghi wrote in a note on Thursday that "we do worry that such theatrics will unnecessarily undermine investor confidence in Tesla's outlook".

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