Tesla CEO Elon Musk doubles down on 'bonehead' remark
Tesla CEO Elon Musk defended his criticism of analysts during the company’s recent earnings call, though he acknowledged it was “foolish” to cut off their questions.
Tesla’s stock dropped more than 5% on Thursday after Musk, speaking after the electric car maker reported stronger revenue than expected, dismissed two questions about Model 3 orders and reduced spending plans. He told one analyst that “boring, bonehead questions are not cool.” Then, unsatisfied with the following question, Musk ended the queue and spent 20 minutes answering product-related questions from a YouTube channel host.
“The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors,” Musk wrote on Twitter. The executive has been critical in the past of investors who “short” Tesla shares, meaning they are betting that the stock will decline.
Musk said a question about capital expenditures was “boneheaded” because the information was contained in Tesla’s letter to shareholders. It was “absurd” to ask about Tesla’s rate of converting Model 3 reservation holders into buyers, he said, because “Tesla has roughly half a million reservations, despite no advertising & no cars in showrooms.”
When a Twitter user suggested that Musk could have blocked the analysts from speaking on the conference call, the Tesla founder responded, “True.”
Musk added: “And once they were on the call, I should have answered their questions live. It was foolish of me to ignore them.”
Musk’s Twitter comments seem to have eased investors’ nerves. Tesla shares rebounded Friday, climbing more than 4% in recent trading.
Wall Street analysts are closely following Tesla’s progress as the company works to resolve Model 3 production delays. Tesla aims to boost production quickly from 2,270 Model 3 sedans per week in April to 5,000 by the end of June. The aggressive plan has forced Tesla to burn through cash at a rapid clip, with negative free cash flow hitting $1 billion in the first quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 357.09 | +11.93 | +3.46% |
Some analysts believe the manufacturer will look to raise capital later this year to support the Model 3 ramp-up and the development of three new vehicles already in the pipeline. During the earnings call on Wednesday, Musk said he doesn’t want Tesla to raise extra cash.
Tesla affirmed its forecast for positive cash flow by the second half of the year. The company also expects to report profits in both the third and fourth quarters. Full-year spending will be less than $3 billion, Tesla said, down from a prior estimate of more than $3.4 billion.