Musk Admits Snubbing Analysts Was Probably A Boneheaded Move
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.
Musk believes the two analysis he rebuked — RBC Capital Markets’ Joseph Spak and Bernstein’s Toni Sacconaghi — were asking questions designed to stoke a short-selling frenzy. He decided instead to take questions from a Tesla investor and Musk acolyte.
“I should have answered their questions live. It was foolish of me to ignore them,” Musk wrote in a tweet Friday morning addressing the call. He believes Spak and Sacconaghi are short-selling Tesla, even though both analysts hold a neutral rating on the Silicon Valley auto company.
True. And once they were on the call, I should have answered their questions live. It was foolish of me to ignore them.
— Elon Musk (@elonmusk) May 4, 2018
“The ‘dry’ questions were not asked by investors, but rather by two sell-side analysts who were trying to justify their Tesla short thesis. They are actually on the *opposite* side of investors,” Musk added in a follow-up tweet.
He gave the remaining portion of the earnings call to Tesla investor Galileo Russel, host of the “HyperChange TV” YouTube channel “We’re gonna go to YouTube. Sorry. These questions are so dry. They’re killing me,” he said before moving on from Spak and Sacconaghi’s questions.
The gaffe could be especially painful as Tesla might need to jump back into the capital markets to subsidize Model 3 production.
Things have not gone well for the company lately. Moody’s dropped Tesla’s credit rating in March and changed the company’s outlook to negative as the fledgling Model 3’s production dwindles while the automaker’s financial situation grows dim.
Tesla will need to raise more money in the near future to meet its cash needs, the credit rating agency claimed. Moody’s labeled the electric car marker a substantial risk for investors willing to dive headfirst into the auto market.
Tesla has not responded to questions about Moody’s downgrade, according to a CNBC report. S&P adjusted the company’s credit down to a negative B rating in April 2017 — it also holds a negative outlook for Tesla going forward.