INSUBCONTINENT EXCLUSIVE:
Authors: Jordan
Elon Musk's usually chummy
relations with Wall Street just took a troubling turn.During a highly unusual earnings call, Tesla's chief executive officer cut off
analysts and got defensive about probing questions pertaining to the electric-car maker's finances
The company burned through more than $1 billion for the third time in four quarters.Musk, 46, said he won't need to go back to equity or
debt markets this year to seek additional funds for Tesla, but crossing Wall Street may be a bad idea
The billionaire wooed investors into buying $1.8 billion worth of bonds in August, which fell within a week
Five months earlier, Tesla sold about $1.25 billion worth of stock and convertible debt.Musk aimed his sharpest words at Toni Sacconaghi of
Bernstein, who rates Tesla the equivalent of a hold
After the analyst asked a question about whether the company could reach its 25 percent gross margin target on the Model 3, Chief Financial
Officer Deepak Ahuja said recently imposed tariffs, more expensive commodities and higher labor costs factored into the company's
guidance."Yeah, but we're talking about a 3 percent to 5 percent difference, and that's something that we'll solve like within three months
to six months later," Musk said
"So don't make a federal case out of it." One set of questions from the YouTube host, Gali Russell, was about Tesla's supercharger network
(Reuters)Sacconaghi pressed ahead with another query about Tesla lowering its 2018 capital expenditure projection to $3 billion, from $3.4
Ahuja said the carmaker would spend less by simplifying its approach to automation and curtailing infrastructure outlays."And so where
specifically will you be in terms of capital requirements" Sacconaghi said."Excuse me
Next," Musk said to the call operator
"Boring, bonehead questions are not cool
Next"Joe Spak of RBC Capital Markets followed with an inquiry about how many Model 3 reservation holders were actually taking the step to
configure their car when invited to do so.After a pause, Musk said "We're going to YouTube," referring to the owner of a channel on the
video-streaming service who had lobbied Musk ahead of time for the chance to ask questions on behalf of retail investors."Sorry," Musk said,
"these questions are so dry
They're killing me." Elon Musk, 46, said he won't need to go back to equity or debt markets this year to seek additional funds for Tesla,
but crossing Wall Street may be a bad idea
(AFP)Toward the end of the call, Musk was blunt with Ben Kallo, a Robert W
analyst who prefaced a question by saying he understood the CEO's frustration for "how myopic we are right now.Kallo, who rates Tesla a buy,
encouraged Musk to give more updates about progress making Model 3 sedans, in order to help the company's stock."I think that if people are
concerned about volatility, they should definitely not buy our stock," Musk replied
"I'm not here to convince you to buy our stock
Do not buy it if volatility is scary
There you go."One set of questions from the YouTube host, Gali Russell, was about Tesla's supercharger network and whether it should be
available to other automakers, as Musk has suggested, or kept as a strategic moat."First of all, I think moats are lame," Musk said
"They're like nice in a sort of quaint, vestigial way
But if your only defense against invading armies is a moat, you will not last long
What matters is the pace of innovation
That is the fundamental determinant of competitiveness."
