Tesla drops in premarket after Musk lets loose on call


Musk, 46, rejected analysts' questions during the Wednesday call to discuss another quarter in which Tesla burned more than US$1 billion in cash. Musk's comments may have been enough to assuage them for now.

Tesla shares fell as much as 1.2 per cent as of 9:35 a.m.in NY, a day after Musk's behavior on the company's earnings call sent the stock down by the most in more than a month. Musk said having a software platform to manage the network is the priority, which would enable "millions of shared, autonomous electric vehicles". But that's no reason to hand the call over to a blogger from YouTube for a dozen questions that spanned 23 minutes, which is what Musk did.

But of course, there are plenty of good reasons to ask such questions. Brokerage firms fear that those negative ratings will anger companies and cost their clients special access to executives. "Do not buy it if volatility is scary".

Speaking at the Kase Learning Short Selling Conference in New York, Stanphyl Capital Partners founder Mark Spiegel criticized Tesla's financials and said they are "worsening" under heavy competition from luxury automakers. On Wednesday, the Tesla CEO took analysts and the media to task.

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RBC Capital Markets analyst Joseph Spak: The first question is related to the Model 3 reservations. "Please sell our stock and don't buy it".

Musk's decision to pick a fight with Wall Street looks ill-timed. Analysts expect Tesla may soon need to raise $2 billion by selling additional stock or debt. While Musk acknowledged he erred by ignoring questions, he also reinforced his criticism of the analysts.

However, his justification for calling out the other analyst speaks to how much work Tesla still has in front of it. Musk argues it would be impossible to fulfill existing Model 3 orders even if production goals are met, due to high demand. By the time Spak had the floor and inquired about the number of reservations for Tesla's Model 3 auto, Musk shut it down by saying he simply didn't want to answer "dry" questions.

Musk rested his case with a parting shot and a warning to his critics. "Flamethrowers should arrive just in time", the CEO wrote Friday.