Elon Musk accepts his move to snub Tesla analysts was 'foolish'

Saturday, 05 May, 2018

Tesla CEO Elon Musk acknowledged it was "foolish" of him to snub a pair of Wall Street analysts during an earnings call that quickly derailed into a circus-like atmosphere.

Elon Musk pledged to "burn" investors shorting Tesla Inc. and criticized analysts and even himself after exchanges during the electric-car maker's earnings call sent shares tumbling. Short interest - a measure of bets that a stock will drop - sits at a whopping $11 billion, outpacing the next-most-shorted company, Apple, by more than $1.5 billion, according to data compiled by financial analytics firm S3 Partners. He later cut off the "dry" questions from analysts, saying "they're killing me". The change is to focus more on immediate projects, and management's comments on the call suggest that the Model 3 is by far the top priority-as it should be, in our view.

Tesla's next model bound for production is the Model Y, a small SUV related to the Model 3. It is trying to build 5,000 of the vehicles per week by the end of June and overcome manufacturing hurdles that have delayed its rollout.

Musk turned to Twitter this Friday to defend his behavior that had caused a 5% dip in the share value of Tesla. But short sellers, who shorted almost 400,000 shares on Thursday, doubled that amount on Friday, according to financial analytics firm S3 Partners.

Elon Musk: Excuse me.

Watch Tesla trade in real time here.

Sacconaghi has a $265 price target on the stock, while Spak sees the shares falling to $280. During the earnings call on Wednesday, Musk said he doesn't want Tesla to raise extra cash.

Cowen analyst Jeffrey Osborne dubbed the call, in which Musk talked of "barnacles, flufferbots, and bonehead bears", surreal. After the company reaches that threshold, it said it will make new options available to Model 3 customers. But neither can be said to "represent a short seller thesis, not investors", as Musk wrote on Twitter. "They are actually on the *opposite* side of investors", Musk tweeted on Friday. He devoted 23 minutes to 25-year-old Tesla investor, Galileo Russell, who runs HyperChange TV. Investor feedback is that the performance shook confidence, which we'd argue is an important piece of the Tesla story. Tesla built just 2,400 of the sedans in the first six months of production, although the company says it is now building approximately that amount per week and targets a 5,000-per week figure in the next two months.

But it's not as if Wall Street or most analysts think Tesla is going to fail.