Investors seemed to take another big quarterly loss from Tesla in stride. At least, until Elon Musk started talking.
The chief executive's contentious conference call with analysts after Tesla's earnings announcement on Wednesday sent shares of the electric-car maker sharply lower. And the losses extended into Thursday's trading session.
Tesla's stock price fell more than 8 percent in morning trading Thursday, after Musk butted heads with analysts on the call who wanted updates on the company's continuing production issues and high cash-burn rate. At one point Musk even told one analyst: "We have no interest in satisfying the desires of day traders. I couldn't care less. Please sell our stock and don't buy it."
Shareholders were listening. The stock sell-off gained pace after the conference call began at 4:30 p.m. Wednesday. And volume surged as the stock fell after the open of trading Thursday. The shares fell $16.70, or 5.6 percent, to close Thursday at $284.45.
"Let's just say that Elon's behavior on the call should give even the uberbulls pause," wrote Brian Johnson, an analyst who covers Tesla at Barclays Capital, who described the conference call as "downright bizarre."
Conference calls after earnings reports are released tend to be clubby affairs where analysts gently probe executives for details to adjust their profit and revenue estimates up and down for coming quarters.
But Tesla's call Wednesday contained considerable fireworks. Musk cut off an analyst asking about the company's need to raise additional money from investors.
"So where specifically will you be in terms of capital requirements?" asked Toni Sacconaghi, an analyst covering Tesla for Sanford C. Bernstein.
"Excuse me," Musk responded. "Next. Boring bonehead questions are not cool. Next?"
Another analyst then tried to ask about orders for the Model 3, the mass-market Tesla vehicle seen as crucial to the company's future.
"We're going to go to YouTube," Musk answered. "Sorry. These questions are so dry. They're killing me."
He then turned a large portion of the call over to a series of questions from Galileo Russell, who hosts a "financial talk show geared towards millennials" on YouTube, according to his profile on LinkedIn. Russell had asked on Twitter before the call if he could pose a question on behalf of individual investors, and Musk had agreed.
Over the past five years, Tesla has at times been one of the hottest stocks in the market and was widely owned by both individual investors and technology enthusiasts, as well as institutional investors excited about the long-term business prospects for the company.
Since 2013, its shares are up more than 700 percent, dwarfing the gain of more than 80 percent for the broader Standard & Poor's 500 stock index. But since peaking in September 2017, the shares have slumped by more than 20 percent, as concern has grown about ongoing production problems for the Model 3, and the prodigious amount of cash the company is burning through.
Many expect that its need for cash will require the company to turn to capital markets to raise more capital. In light of that, some analysts have suggested that Musk's attitude toward Wall Street could be self-defeating.
"The analysts on the call represent the providers of capital that Tesla has throughout its history depended upon," wrote Adam Jonas, who covers Tesla for Morgan Stanley.
Business on 05/04/2018