Tesla CEO’s peculiar conduct causes angst on Wall Street
DETROIT — Elon Musk’s quirky behavior long has been chalked up to that of a misunderstood genius. But never have his actions caused so much angst on Wall Street.
Investors have for years endured millions of dollars in short-term losses in hopes of a longterm payoff. They might have even been able to stomach the $8.3 million that Telsa Inc. burns through each day. But it was a conference call Wednesday night that left many wondering how much more they can take.
Just after the electric car and solar panel company announced a record first-quarter loss, the Tesla CEO cut off two analysts who sought some basic answers: details about the company’s cash needs and orders for its all-important Model 3 mass-market electric car.
“These questions are so dry. They’re killing me,” Musk said as he dismissed an RBC Capital Markets analyst in favor of a blogger who served up queries more to his liking.
Musk called the analyst questions boring and “not cool.”
Shares fell quickly in after-hours trading, and analysts began writing that Musk shouldn’t bite the hands that feed his company’s enormous cash needs because soon he may need more. By Thursday afternoon, Tesla stock had lost nearly 6 percent of its value.
“While they may be dry in nature, we argue such questions are extremely important for a highly leveraged and cash-hungry company,” Morgan Stanley analyst Adam Jonas wrote in a note to investors.
The conference call behavior was labeled bizarre by some investors. It also followed
some recent wild tweets by Musk about building a cyborg dragon, how his eyebrows can grab things and an April 1 post in which he wrote, “Despite intense efforts to raise money, including a lastditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can’t believe it.”
To be sure, Musk has joked in the past and poked fun at critics. He often posts updates to his 21.5 million Twitter followers about his companies, retweets posts from happy customers and warns about artificial intelligence.
A Tesla spokesman wouldn’t comment on Musk. But the stock slide showed that Wall Street’s seemingly endless patience with Musk — who is also a rocket scientist and tunnel company chief — may be growing thin.
Tesla has fallen far short of Musk’s promises to ramp up Model 3 production, which the company has said is key to turning a profit. Tesla has more than 450,000 waiting orders, but it can’t monetize them unless the cars can be assembled en masse.