I was on this call. It was extremely cringey/embarrassing to hear Elon dismiss valid questions.
At the same time, it was fantastic to see a young, smart, retail investor (Gali from Hyperchange) get to ask so many questions directly to the leadership team. I thought before the call that Gali would get to ask only one question, like the other analysts. He was able to ask almost 10!
It was surreal. I was left feeling that the team overall did a great thing by allowing Gali but wished that Elon didn’t insult the institutional investors by (at least so harshly) dismissing valid questions.
>“We’re going to go to YouTube, sorry. These questions are so dry. They’re killing me.” He directed the operator to take questions from Tesla investor Galileo Russell, whose HyperChange TV YouTube channel features a video titled, “Why I Bought Tesla Today at $255/Share.”
>Mr. Russell, who had campaigned to get on the call usually reserved for analysts, got more than 20 minutes from Mr. Musk. The first of his dozen or so questions: When will Tesla launch its own network of driverless cars?
>“Thank you for an interesting question,” Mr. Musk replied.
It's especially cringey because if Musk was honest about that interesting question he would say he has no idea and should really be focusing on ramping up production. Instead it's a softball question that lets Musk proselytize on the radical world changing work that Tesla is doing...
"Sacconaghi pressed ahead with another query about Tesla lowering its 2018 capital expenditure projection to $3 billion, from $3.4 billion. Ahuja said the carmaker would spend less by simplifying its approach to automation and curtailing infrastructure outlays.
'And so where specifically will you be in terms of capital requirements?' Sacconaghi said.
'Excuse me. Next. Next,' Musk said to the call operator. 'Boring, bonehead questions are not cool. Next?'"
Yeah but his questions weren't really that great. The two questions from analysts he skipped before throwing it to the youtube guy were tough questions asking about specific details that Elon obviously didn't want to answer. Youtube guys questions were softer which is why Elon stayed with him for so long. I have to say I think letting someone like Gali ask questions at all is pretty bad, it specifically degrades what these calls are for. It's basically a filibuster.
There was a petition of sorts on twitter to get Hyperchange on to the conference call. I think Elon was trying to segue with a plug to these guys because they aren't the regulars.
I'm asking seriously though, what would he stand to gain from hiding info about capex? Or do you think the reaction from investors is due to his attitude or signs of stress/things going wrong internally?
If an investor's decision to buy or sell a stock is based on how "cringey" a conference call is and not the numbers then I think they are in the wrong business. I think Elon did the right thing. It would be better for Tesla in the long term if the day traders sell their stocks. Tesla fans such as myself would love to pick up some stocks at low prices and because we buy into the vision we will not sell it anytime soon which brings more stability to the stock.
Elon has always seemed to have the attitude of "not everyone should invest in this stock". I find this refreshing. God forbid a CEO do anything except try to drive the share price as high as humanly possible.
I don't know if this carries the same weight in a public company, but setting expectations with investors is super important in a startup and prevents a ton of wasted time wrangling investors who don't get the true cost/benefit ratio of what you're doing.
What a weird call. Especially the callout of the diamler CEO.
Elon says that the diamler CEO does not understand physics
"He doesn't know much about physics. I know him. I'd be happy to engage in a physics discussion with him. I actually studied physics in college."
Wiki says otherwise:
"... studied electrical engineering from 1971 to 1976 at the University of Karlsruhe; he graduated as an engineer. He completed his doctorate in engineering in 1982 at the University of Paderborn."
Tesla is clearly flying close to the sun, and Musk is not incorrect to suggest that investors who can't take that kind of risk should not be along for the ride; however, it probably would have been more prudent to hold back on that pronouncement, given that many investors seem to have taken the hint and exited the stock...
Tesla is a giant confidence game - as are most high growth opportunities.
> Musk is not incorrect to suggest that investors who can't take that kind of risk should not be along for the ride
Risk is fine. Blind risk is not. Questions about cash position for a money-losing company with less cash on hand than it burned in the trailing 12 months are prudent.
I read through the transcript of the call [1], and it was not as bad as the headlines make it out to be. But unless they start delivering larger numbers of Model 3s, they will have to raise additional capital later this year or face running out of money. Tesla is still basically a startup and they were hours away from bankruptcy once before in 2008, so this is not entirely impossible. Musk claims they will be cash flow positive in Q3, but so far they have missed Model 3 production targets for the last three quarters, although they got close at the end of Q1.
Under these circumstances, it is not unreasonable for investors to hold you accountable and inquire about the financial situation and plans. Musk's conduct was unprofessional and he could have handled those questions more gracefully instead of dismissing them and berating the people who had been asking them. This kind of behaviour does not exactly inspire confidence, and burning your bridges with the very banks that you might need to raise money later on was certainly not his smartest move.
If memory serves it's not his first remarks of this nature. I see my TSLA stock as a way to contribute to the version of the future I want to live in and not a ROI driven investment.
I have been investing a portion of my paycheck every month for the last three years and never sold TSLA. It's bothering me to see so many high profile departures particularly in finance/accounting groups. And yesterday's conference call was a disaster, I see it as dodging valid questions related to current state of the company and answering open ended interesting questions like "When will Tesla launch its own network of driverless cars?".
I just dumped all the $TSLA stock I have bought for the last few years.
Picking stocks like that is not considered a good way of investing your money (unless its a small portion which you specifically don't expect to appreciate). I urge you to reconsider your financial planning and perhaps take a look at ETF's.
Haven't read the paper, but isn't the causality the other way around? As in, troubled companies call on bullish analysts to try to keep up good appearances, but then underperform anyway because of their problems?
The strange thing is, Tesla finally seems to be getting decent production rates on their Model 3 line.[1] They got 2500 cars out the door in a week at peak, which is respectable. Until recently, output was so low that it was clear the line wasn't working right. They then shut down to retune their production line, which makes sense. They should soon be cranking about 2500-3000 cars a week without much fuss. Once first shift is running smoothly, they can add a second shift.
Tesla may be over the hump on getting the business working. But profitability is still a ways off. Tesla may need more capital to get there.
What Tesla doesn't need now are distractions. The truck, the new roadster, the next model, self-driving. They need to focus on shipping product before the money runs out.
If Smith & Wesson launched a consumer flamethrower there would be outrage...Musk has been able to distract with lots of shiny objects but the clock is ticking, even amongst his niche fan base...I hope all the people who are working so hard in Musk's various companies come out of this ok...
Having watched clip in the article and given I don't have any Tesla stock. Additionally having been an operations manager I have some sympathy for Musk. Every Tom, Dick, and Sally has an opinion but very few have the know-how to help. But in today's world who needs to be an expert to comment or pass judgment. On the one hand we have CEOs who chase the quarterly earnings at the cost of long-term sustainability. Musk says he isn't interested in short-term (in not so many words). Either way, you going to piss someone off. Like I said I don't have stock in the game.
I was reading all of the thoughtful critiques of Elon's behavior when something occurred to me: there is an awful lot of brain power here that is spending an awful lot of time analyzing the decisions and words of one man.
It's actually odd when you think about it: we do a lot of observing and commenting these days (myself included) and I wonder how much more productive we would be individually and as a society if more of our energy was invested in creation and building.
It sounds to me like Musk has a card up his sleeve. If he were truly in fear for the continued existence of Tesla, he would have been very patient and accommodating toward those whom he might need to approach later for more capital. I suspect that he has already secured the capital (or assurances that he will).
It’s alarming to see the volume of kneejerk defensiveness here. You can idolize Elon Musk but still have a fact-based, rational perspective. You can be rooting for Tesla in the most tribal and idealistic way imaginable and still see their financial challenges clearly and analytically.
One of the things I was really was going to happen with Tesla would have been a revival of the boutique auto industry - whereby, one could buy all the subcomponents of the Tesla - a full drive-train-chassis setup with all controls and then build custom bodies on top of them
Like trucks and vans etc.
Pipe-dream sure, but I was really hoping that this would happen.
How hard would it be to extend the length of the chassis only to allow for a long van/bus/truck be built on top of it (and by how hard, I mean "how hard" - not "it couldn't be that hard, could it" type of question)
Tesla is effectively the Apple of the car world. The whole thing is locked down, and if you make modifications to the car, they will brick it with software.
[+] [-] mephitix|8 years ago|reply
At the same time, it was fantastic to see a young, smart, retail investor (Gali from Hyperchange) get to ask so many questions directly to the leadership team. I thought before the call that Gali would get to ask only one question, like the other analysts. He was able to ask almost 10!
It was surreal. I was left feeling that the team overall did a great thing by allowing Gali but wished that Elon didn’t insult the institutional investors by (at least so harshly) dismissing valid questions.
[+] [-] arkis22|8 years ago|reply
>“We’re going to go to YouTube, sorry. These questions are so dry. They’re killing me.” He directed the operator to take questions from Tesla investor Galileo Russell, whose HyperChange TV YouTube channel features a video titled, “Why I Bought Tesla Today at $255/Share.”
>Mr. Russell, who had campaigned to get on the call usually reserved for analysts, got more than 20 minutes from Mr. Musk. The first of his dozen or so questions: When will Tesla launch its own network of driverless cars?
>“Thank you for an interesting question,” Mr. Musk replied.
It's especially cringey because if Musk was honest about that interesting question he would say he has no idea and should really be focusing on ramping up production. Instead it's a softball question that lets Musk proselytize on the radical world changing work that Tesla is doing...
[+] [-] JumpCrisscross|8 years ago|reply
'And so where specifically will you be in terms of capital requirements?' Sacconaghi said.
'Excuse me. Next. Next,' Musk said to the call operator. 'Boring, bonehead questions are not cool. Next?'"
https://www.bloomberg.com/news/articles/2018-05-03/elon-musk...
[+] [-] danso|8 years ago|reply
[+] [-] frgtpsswrdlame|8 years ago|reply
[+] [-] plint|8 years ago|reply
I'm asking seriously though, what would he stand to gain from hiding info about capex? Or do you think the reaction from investors is due to his attitude or signs of stress/things going wrong internally?
[+] [-] nodesocket|8 years ago|reply
Elon called out the press for writing misleading articles to generate clicks. He went as far as calling it irresponsible and dangerous.
He also called out day-traders, saying of you can't handle volatility then sell your stock. "I am not here to convince you to buy Tesla stock."
You can listen to the call at https://edge.media-server.com/m6/p/nwvzygvo
[+] [-] s2g|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] debt|8 years ago|reply
Investors immediately responded to Elon's hubris in kind by severely punishing the stock. Seems the joke is on Musk.
[+] [-] Retric|8 years ago|reply
Was this bad enough that you wanted to sell?
[+] [-] supergirl|8 years ago|reply
[+] [-] pooya13|8 years ago|reply
[+] [-] rawrmaan|8 years ago|reply
I don't know if this carries the same weight in a public company, but setting expectations with investors is super important in a startup and prevents a ton of wasted time wrangling investors who don't get the true cost/benefit ratio of what you're doing.
[+] [-] Zhenya|8 years ago|reply
Elon says that the diamler CEO does not understand physics "He doesn't know much about physics. I know him. I'd be happy to engage in a physics discussion with him. I actually studied physics in college."
Wiki says otherwise:
"... studied electrical engineering from 1971 to 1976 at the University of Karlsruhe; he graduated as an engineer. He completed his doctorate in engineering in 1982 at the University of Paderborn."
-https://en.wikipedia.org/wiki/Dieter_Zetsche
[+] [-] justin66|8 years ago|reply
https://www.bloomberg.com/news/articles/2018-02-21/daimler-t...
[+] [-] nick_urban|8 years ago|reply
[+] [-] douglaswlance|8 years ago|reply
[+] [-] ttul|8 years ago|reply
Tesla is a giant confidence game - as are most high growth opportunities.
[+] [-] JumpCrisscross|8 years ago|reply
Risk is fine. Blind risk is not. Questions about cash position for a money-losing company with less cash on hand than it burned in the trailing 12 months are prudent.
[+] [-] this_user|8 years ago|reply
Under these circumstances, it is not unreasonable for investors to hold you accountable and inquire about the financial situation and plans. Musk's conduct was unprofessional and he could have handled those questions more gracefully instead of dismissing them and berating the people who had been asking them. This kind of behaviour does not exactly inspire confidence, and burning your bridges with the very banks that you might need to raise money later on was certainly not his smartest move.
[1] https://seekingalpha.com/article/4169027-tesla-tsla-q1-2018-...
[+] [-] philwelch|8 years ago|reply
Do you literally mean that Tesla is a scam? (That’s the normal meaning of “confidence game”, i.e. “con game”).
[+] [-] qaq|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] greglindahl|8 years ago|reply
[+] [-] debt|8 years ago|reply
If by "flying close to it" you mean flailing end over end into it then yes.
[+] [-] kc10|8 years ago|reply
I just dumped all the $TSLA stock I have bought for the last few years.
[+] [-] pm90|8 years ago|reply
[+] [-] garmaine|8 years ago|reply
[+] [-] komali2|8 years ago|reply
I for one have been loving the dump, makes it real easy to buy.
[+] [-] pooya13|8 years ago|reply
[+] [-] jsw97|8 years ago|reply
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2479542
Paper finds that "firms that 'cast' their conference calls by disproportionately calling on bullish analysts tend to underperform in the future."
[+] [-] uryga|8 years ago|reply
[+] [-] Animats|8 years ago|reply
Tesla may be over the hump on getting the business working. But profitability is still a ways off. Tesla may need more capital to get there.
What Tesla doesn't need now are distractions. The truck, the new roadster, the next model, self-driving. They need to focus on shipping product before the money runs out.
[1] https://www.bloomberg.com/graphics/2018-tesla-tracker/
[+] [-] olivermarks|8 years ago|reply
If Smith & Wesson launched a consumer flamethrower there would be outrage...Musk has been able to distract with lots of shiny objects but the clock is ticking, even amongst his niche fan base...I hope all the people who are working so hard in Musk's various companies come out of this ok...
[+] [-] bjl|8 years ago|reply
[+] [-] danso|8 years ago|reply
[+] [-] txsh|8 years ago|reply
[+] [-] namlem|8 years ago|reply
[+] [-] natch|8 years ago|reply
[+] [-] aresant|8 years ago|reply
But Apple is sitting on ~$270b of cash (1).
And is run by a guy in Tim Cook that is a world class operator and fulfillment guy.
And who has been criticized for lacking vision :)
We can dream right?
(1) https://www.cnbc.com/2018/05/01/apple-q2-2018-earnings-heres...
[+] [-] Clubber|8 years ago|reply
[+] [-] mmsimanga|8 years ago|reply
[+] [-] unclebucknasty|8 years ago|reply
It's actually odd when you think about it: we do a lot of observing and commenting these days (myself included) and I wonder how much more productive we would be individually and as a society if more of our energy was invested in creation and building.
[+] [-] mathinpens|8 years ago|reply
[+] [-] howaboutnmc|8 years ago|reply
Transcript : https://seekingalpha.com/article/4169027-tesla-tsla-q1-2018-...
[+] [-] avoutthere|8 years ago|reply
[+] [-] mwfunk|8 years ago|reply
[+] [-] samstave|8 years ago|reply
Like trucks and vans etc.
Pipe-dream sure, but I was really hoping that this would happen.
How hard would it be to extend the length of the chassis only to allow for a long van/bus/truck be built on top of it (and by how hard, I mean "how hard" - not "it couldn't be that hard, could it" type of question)
[+] [-] stale2002|8 years ago|reply
Tesla is effectively the Apple of the car world. The whole thing is locked down, and if you make modifications to the car, they will brick it with software.
You don't really "own" that Tesla.