Elon Musk rejects ‘boring’ analysts after Tesla burns $1 billion in March quarter
The earnings report started optimistically enough, with Elon Musk forecasting an end to Tesla Inc.’s cash-burning days after blazing through another $1 billion last quarter.
But by the end of Tesla’s first-quarter conference call, Musk was berating analysts for asking “boring” questions, the shares had plunged and any shred of predictability was out the window.
Musk, 46, has built up a showman’s reputation as the founder and chief executive officer of Tesla, calling on true believers to help him overcome the “haters” who question his company’s ability to usher in an electric-vehicle age on an ambitious timetable.
His performance on Wednesday revealed his willingness to bite the hand that feeds, ridiculing representatives of Wall Street’s biggest banks who tried to pinpoint how he’d live up to his promises to build more Model 3 sedans and generate cash in the second half of the year.
Musk cut off analysts’ queries about the company’s capital requirements and whether it was retaining Model 3 reservation holders, calling the questions “so dry” and “not cool.” The stock sank 5% to $286.13 in trading before the US exchanges opened.
“The boring questions can also be categorised as the tough ones,” said Dave Sullivan, an analyst at AutoPacific Inc. “I hope the Tesla fans know how to swim, because without the answers to the tough questions, it looks like Musk is leading them straight into the water.”
Tesla’s balance sheet also was a sore subject for Musk. While Tesla expressed confidence about the second half of the year, negative free cash flow was more than $1 billion for the third time in the last four quarters. The result was also worse than analysts’ average estimate for cash burn of about $978 million.
Tesla had $2.67 billion in cash on hand at the end of the first quarter, down from $3.37 billion at the end of last year.