May 4, 2018 / 6:19 PM / 7 months ago

Factbox: Musk seeks to soothe Wall Street nerves after snub

(Reuters) - Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk said on Friday it was “foolish” of him to snub Wall Street analysts on a post-earnings conference call on Wednesday.

FILE PHOTO: Elon Musk listens at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper/File Photo

In a series of tweets on Friday, he claimed the two analysts he cut off “were trying to justify their Tesla short thesis.” But the two have ‘hold’ or ‘neutral’ ratings on the stock, according to Thomson Reuters data.

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.

The chain of events to Musk’s tweets on Friday:

WEDNESDAY, MAY 2 (ON THE EARNINGS CALL):

Bernstein analyst A.M. (Toni) Sacconaghi: So where specifically will you be in terms of capital requirement?

Elon Musk: Excuse me. Next, next. Boring questions are not cool.

RBC Capital Markets analyst Joseph Spak: The first question is related to the Model 3 reservations... Like of the reservations that actually opened and made available to configure, can you let us know like what..how..what percentage have actually taken steps to configure?

Elon Musk: We’re going to go to YouTube, sorry. These questions are so dry. They’re killing me.

RESPONSES FROM SACCONAGHI & SPAK

“Tesla’s Q1 earnings call was a unique experience, to say the least...Beneath the bizarre theatrics, however, we see Tesla’s Q1 as in-line with expectations on most metrics, including revenues, gross margins, and free cash flow,” Sacconaghi in a client note on Thursday

“An odd conference call that lacked answers to questions on investors’ minds and overshadowed earnings. Investor feedback is that the performance shook confidence, which we’d argue is an important piece of the Tesla story. The results themselves probably did little to incrementally persuade bulls/bears either way. There is still healthy, and warranted, skepticism about Tesla’s near-term production capabilities,” Spak in a client note on Thursday. He cut his PT to $280 and lowered his outer-year margin assumptions.

MUSK’S TWEET THREAD ON FRIDAY, MAY 4:

The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors [Link here]

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 [Link here]

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. [Link here]

Reporting by Sonam Rai in Bengaluru; Editing by Sriraj Kalluvila

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