Via The LA Times the first question that irritated Elon Musk came from Toni Sacconaghi of Sanford C. Berstein who asked about capital requirements. The next question came from Joe Spak of RBC Capital Markets asking about what percentage of those who reserved a Model 3 went ahead with the purchase.
Musk later defended his response to the analysts. ABC News reports that on Friday (May 4):
On Twitter he [Elon Musk] said the questions came from "analysts who represent a short seller thesis, not investors." That is, he felt the analysts who questioned him were either betting against Tesla's stock, a claim he didn't present evidence for, or were only thinking about the short term while other investors want Tesla to succeed.
I figured I'd search on the names that The LA Times mentioned as the first thought that hit me as I was reading the articles was to actually research where the two analysts stand on the stock.
Here's what Forbes has to say:
Both Bernstein analyst Toni Sacconaghi and RBC analyst Joseph Spak have Tesla rated "hold," not sell. In addition, Spak's price target at the time of the call (he has since lowered it) was $305, actually above the closing price of Tesla shares that day, hardly a "short" call.
While watching Bloomberg, some individuals mentioned that Musk's outburst might have been driven by a lack of sleep. Perhaps, but his tweet almost seems to imply that it had nothing to do with a lack of sleep, but an irritation with the questions. He's not directly saying the two analysts were short sellers, but that their questions were made to ask about potential troubles with Tesla. If true, it would seem to me that there are issues with Tesla that Musk is worried about and doesn't want to discuss.
I wrote an earlier blog where I found the April Fools' day jokes funny. This one, I don't think so. Yes, Musk has a point that these are analysts and not investors. But investors do use analysts to determine if they should buy or sell a stock so to me analysts are representatives for investors.
Regarding the financial results: The New York Times addresses my biggest concern about Tesla -- cash flow.
1. Tesla’s negative free cash flow increased to about $1 billion in the first quarter, up from $277 million during the fourth quarter of last year.
2. The company had $2.67 billion in cash at the end of the first quarter, compared with $3.37 billion at the end of December.
3. While reporting its first-quarter earnings on Wednesday, the company made the surprising announcement that it was going to “significantly cut back” the amount of money it spends on its facilities and equipment. Such capital expenditures will most likely total slightly less than $3 billion this year, Tesla said, down from its earlier forecast of more than $3.4 billion.
I believe the reason the fourth quarter cash flow was only $277 million was due to deposits on future vehicle introductions.
Cutting capital expenditures really does seem like they are concerned about cash flow no matter what Musk says about the matter.
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