Tesla stock drops as Elon Musk gives bizarre earnings call
Tesla stock dropped more than five per cent after Wall Street analyst’s earnings call question was cut off as ‘boring,’ with CEO Elon Musk taking questions, instead, from a 25-year-old retail investor in Tesla and Youtuber
By Lora Kolodny
Shares in Tesla took a nosedive in after-hours trading local time as Elon Musk cut off analysts during a first-quarter earnings call. He dismissed a question about gross margins from Bernstein senior analyst Toni Sacconaghi as “boring.” Instead, Musk and other executives answered multiple questions from a Tesla enthusiast and Youtuber named Gali Russell.
The 25-year-old retail investor tweeted at Elon Musk on Monday, seeking to ask him a “crowdsourced” question during Wednesday’s conference call. Instead of a single question, Russell was able to ask several.
The stock drop may have become apparent around the time when Musk cut off analysts on the call. However, the company’s first-quarter update has also stoked concerns over Tesla’s cash burn and how, exactly, it will improve margins while ramping Model 3 production.
On the first-quarter call, CEO Elon Musk also promised a “reorganisation” this month. He said:
“I’m feeling quite confident about hitting positive cash flow in Q3. This is not a certainty. It does appear quite likely in my view. We are going to conduct a reorganisation, restructuring of the company this month and make sure we are well set up to achieve that goal. In particular the number of third-party companies we’re using has gotten out of control. We’re going to scrub the barnacles on that front.”
In answering questions from Gali Russell, Musk also revealed that Model Y production is not expected to begin for another two years, and that the vehicle won’t be produced at Tesla’s main, Fremont, Calif. factory.
Musk said, “We will not be starting production of the Model Y at the end of next year. It’s probably closer to 24 months from now, 2020... We could not fit the Model Y production at Fremont. We’re jammed to the gills here. One thing I know for sure is it’s not here.”
Musk’s own compensation is tied to Tesla’s stock price.