Morgan Stanley: "Tesla's Call Was The Most Unusual I Have Experienced In 20 Years"

We were not the only ones who were left speechless by Thursday's Tesla Tanturm: Elon Musk's bizarre, childish, perhaps intoxicated, meltdown during Tesla's conference call, in which he interrupted analysts from Bernstein and RBC, cutting them off in the middle of the question for being "boneheaded, boring and dry" (all they wanted was information on the company's capex plans and Model 3 demand). This morning, the entire sellside appears to have joined in, to wit:

  • TESLA INVESTORS SAY ODD EARNINGS CALL ’SHOOK CONFIDENCE’: RBC
  • TESLA LIKELY TO FALL TODAY AFTER ‘TRULY BIZARRE’ CALL: JPMORGAN
  • TESLA REITERATED SELL AT GOLDMAN ON LIKELY MISSED TARGETS

But the best reaction of all came from Morgan Stanley's traditional Tesla fanboy, Adam Jonas: not even he could ignore the fast-motion carwreck (with or without an autopilot) that Musk unveiled 37 minutes into the call.

His rather shocked note on "The Importance of "Boring Questions" out this morning at 1:29am GMT...

... is below. Enjoy:

Tesla’s 1Q18 analyst conference call was arguably the most unusual call I have experienced in 20 years on the sell- side.  Many investors we spoke with post the call agree.

The first half of the Q&A was dominated by analyst questions about manufacturing, automation, cost, efficiency, and capital... a few other questions covered recent management departures and reservation momentum. We asked about the scope of collaboration between Tesla and SpaceX on data, to which Mr. Musk said “there are many areas for us to collaborate... haven’t really thought about it.” A surprising answer from someone who launched a Tesla Roadster into outer space on a SpaceX rocket.

The call made an odd turn ~37 minutes in when Elon criticized an analyst for asking a 'boring' question about capital requirements and then interrupted the following question (about Model 3 order configuration), saying "We're going to go to YouTube. Sorry. These questions are so dry. They're killing me." He proceeded to take a 23 minute series of questions from a blogger. While the consequences are unquantifiable, we believe Tesla’s CEO made a mistake in refusing to answer some of the analyst questions about the Model 3 ramp. Additionally, we found the posture out of character with the normally inviting, enlightening tone of prior conference calls over many years. While they may be 'dry' in nature, we argue such questions are extremely important for a highly levered and cash hungry company with 2025 bonds trading at 89. As we have highlighted in our previous research, even the short-term cadence of Model 3 production can significantly impact cash levels, liquidity, and financial credit worthiness. This is due to the interplay of fixed cost absorption and negative working capital. In our view, more than any other factor, the path of the Model 3 can determine whether the stock could test our $561 bull case or fall below our $175 bear case.

To be clear. Tonight’s conference call didn't go very well. Feedback we have received from investors during and following the call support this view. Irrespective of the Tesla CEO’s annoyance with the genre of questions he was receiving from the analyst community, we note that an important part of Tesla’s success has been its relationship with the capital markets in funding its ambitious plans. The analysts on the call represent the providers of capital that Tesla has throughout its history depended upon.

Well, when Tesla's access to capital markets is finally cut off in a few quarters, there is always the Teslacoin ICO...

For those who missed it, here is the key part from the call again:

Comments

FireBrander Bone-Machine Thu, 05/03/2018 - 09:05 Permalink

>>Musk is a genius visionary if Tesla survives and actually makes a profit building cars.

>>Musk is an exemplary conman if it doesn't...suckered in Billions and Billions of "investor" dollars on a pipe dream.

Time will tell.

$$$$$$

we note that an important part of Tesla’s success has been its relationship with the capital markets in funding its ambitious plans.

Translation...you haven't made a dime building cars! And without us pouring money into your cash furnace you never will!...be nice to us and sing us another song.

I heard he sang a good song, I heard he had a style
And so I came to see him to listen for a while

I felt all flushed with fever, embarrassed by the crowd
I felt he found my letters and read each one out loud
I prayed that he would finish but he just kept right on

Strumming my pain with his fingers
Killing me softly with his words

~~~~~~~~~~~~~~

"killing us softly with his words"
https://youtu.be/qMzzw6IXH1s

In reply to by Bone-Machine

___ read.between___ FireBrander Thu, 05/03/2018 - 09:07 Permalink

I'm not buying Tesla this morning.

I like "Crazy, Disoriented, Self-Destructive Musk" better than "The Topper Musk".

 

topper definition: douchebag who always attempts to "one better" anything anyone says.  They begin their sentence with, 'that's nothing, I blah, blah, blah'.

In reply to by FireBrander

FireBrander BaBaBouy Thu, 05/03/2018 - 09:23 Permalink

In a year, the government will no longer allow rebates on Tesla's while his competitors will get those rebates.

Will the model 3 be so much better than every other EV that people will pay the premium price?

I was looking at Hyundai's hybrid the other day...lifetime warranty on the battery for as long as you own the car...they don't know me...they'll be buying me batteries until there's nothing left of that car other than the battery...I hate the "jones's" and have no desire to keep up with them.

In reply to by BaBaBouy

DownWithYogaPants FireBrander Thu, 05/03/2018 - 09:56 Permalink

See history of Elon Musk's father.  Bit of a sociopath. Not narcissist. It's heritable.

Elon appears to be gifted in one way or another.  But he's a bit impractical in many ways too.  The Tesla car / barbeque is still dependent on yet to arrive battery technology. That is a material technology which is notoriously slow. People confuse IC technology with other forms.  Not a good idea. 

Sharing cars is like sharing underwear. You'll be happy until you get one that has been shat in.

In reply to by FireBrander

FireBrander shamus001 Thu, 05/03/2018 - 13:07 Permalink

If you want to go fast, buy a motorcycle...Ferarri fast on a Yugo budget.

Seriously, if you like that adrenaline rush from speed, motorcycles deliver far more rush than cars.

I ate alive one of those fancy Mustangs the other day...took my hand off the clutch at, well, let's say "high speed" to look back and encouragingly wave him on to catch up. I wear a helmet...had no idea a geezer just stomped his ass.

In reply to by shamus001

FireBrander cosmyccowboy Thu, 05/03/2018 - 14:36 Permalink

"100 plus in a 55"

LOL!

When I was young, and much less afraid of dying than I am now, I passed a car, in a no passing zone over a slight hill, in a 30mph zone...I wasn't going 35mph;)...and sure as shit on the other side of that hill was a cop...instant lights...I "twisted it" and I'll end the story there.

Years, years back, I was going ~85 in a 55 (remember that 55 limit!) down the highway...Trooper right behind me...didn't even see him come up on me...I pull over...didn't say a word about my speed, but wanted me to put my helmet on that was strapped to the back seat...that's what cops used to be like kiddo's; sorry you missed out!

Geesh, thinking back on all the stupid things I did ~pre 25 years old that resulted in having to explain it to a cop. Doing that today, I'd be a lifer in some Penn somewhere.

In reply to by cosmyccowboy

Bastiat FireBrander Thu, 05/03/2018 - 15:24 Permalink

When I was 16 and already had 1 speeding ticket in NY (a second would get the license suspended) I came over a hill, coming out of a small town with a 30mph speed limit, and parked just over the crest of the hill and about 50 feet inside the 45mph speed limit sign was cop.  I stuck my right arm out about 6" from his nose and flipped him off.  It was my favorite 10 mile stretch down a narrow valley with perfect new pavement.  I ran up a footpath on the bank (about 60ft vertical), dropped the kickstand, lay down on the grass and listened to his siren and squealing tires up and down the valley.  Then I took a nap in the grass for good measure.

In reply to by FireBrander

neidermeyer BaBaBouy Thu, 05/03/2018 - 11:11 Permalink

I agree , in a year he will have figured out how to mass produce #3's ... but he won't be selling many ... and NONE AT A PROFIT... tax credits going away ,, his base cars LOSE money ,, $55k for a car?? That buys some really nice cars ( a M3 , Camaro SS 1LE , etc.)  that you can actually use on long drives without having to check into a fleabag for 24 hours while you charge up for the next 200 mile segment.

In reply to by BaBaBouy

zob2020 _triplesix_ Thu, 05/03/2018 - 14:56 Permalink

I doubt shekels are involved, she just does it out of tribal loyalty as she is one of the first and thus since superseded convent.
As she said in the knesset, yiddish is her home language...

Gotta punish the romans for that 70 ad total annihilation of all jews..oh wait some were supposed to survive but secretly. Meanwhile 6 billion jews were murdered.

In reply to by _triplesix_

MilwaukeeMark shortonoil Thu, 05/03/2018 - 10:44 Permalink

Porsche is carefully watching Tesla from the sidelines and quietly moving towards electric cars which will out perform their gas powered vehicles. Eventually what they learn and execute on successfully will trickle down to VW- Audi. Tesla is just like his namesake, great at building wow-ing inventions, short on the ability to leverage his ideas into profit.

Nicolai Tesla eventually ran out of money. Musk will do the same. His ideas will then be picked over like roadkill and become the foundation  for future successes.

In reply to by shortonoil

NiggaPleeze MilwaukeeMark Sun, 05/06/2018 - 03:51 Permalink

 

What? You are comparing Musk ideas to Tesla?  Musk is a normal guy, at best, Tesla was a genius.  I can't think of a single original idea Musk has had, or even a good one - he's gotten by being a crony capitalist having billions shoved in his face.  His original PayPal is still an utter shit product.  Tesla created AC electricity.  Geez ... Musk fanboy.

In reply to by MilwaukeeMark