Slashdot Mirror
Tesla Stock Plunged After Elon Musk's 'Bizarre' Conference Call (wired.com)
A recent Bloomberg article describes Elon Musk's "bizarre" conference call on Wednesday -- and its aftermath on Wall Street.
Elon Musk told investors not to buy Tesla Inc. shares if they can't stomach volatility. They got the message. The comments -- part of a bizarre, heated conference call after the close Wednesday -- sent the electric-car maker's stock plunging. Tesla fell as much as 8.6 percent Thursday after the chief executive officer rejected analysts' questions on another quarter in which the company burned more than $1 billion in cash.
Investors had shorted a total of more than 40 million shares by Thursday -- the most ever in Tesla history -- and despite a rise in Tesla's stock price on Friday, they shorted 500,000 more shares.
Wired argues that Musk "clearly is avoiding some hard questions about Tesla's financial viability. But it's equally true that the call exposed how limited Wall Street can be about visions for the future and what it takes to create new templates for doing old things." This clash was highlighted by Musk's response to "sober questions by respected Wall Street analysts" like Toni Sacconaghi.
Musk brushed him off, sniping that "bonehead, boring questions are not cool." To add insult to that injury, Musk then fielded questions from a YouTube user, who proceeded to dominate a call normally open only to significant Wall Street analysts. That did not sit well with the Street, and Sacconaghi lambasted Musk the next day on CNBC with the rather clever jab, "This is a financial analyst call, this is not a TED talk."
Friday, Musk returned fire, with tweets asserting that the question was boneheaded because the analyst already knew the answer and was asking purely to advocate a negative thesis about the company.
But Barron's replayed the conference call, and argued that Musk was mistaken, reporting that "the analyst wanted to know about capital requirements, not expenditures."
Investors had shorted a total of more than 40 million shares by Thursday -- the most ever in Tesla history -- and despite a rise in Tesla's stock price on Friday, they shorted 500,000 more shares.
Wired argues that Musk "clearly is avoiding some hard questions about Tesla's financial viability. But it's equally true that the call exposed how limited Wall Street can be about visions for the future and what it takes to create new templates for doing old things." This clash was highlighted by Musk's response to "sober questions by respected Wall Street analysts" like Toni Sacconaghi.
Musk brushed him off, sniping that "bonehead, boring questions are not cool." To add insult to that injury, Musk then fielded questions from a YouTube user, who proceeded to dominate a call normally open only to significant Wall Street analysts. That did not sit well with the Street, and Sacconaghi lambasted Musk the next day on CNBC with the rather clever jab, "This is a financial analyst call, this is not a TED talk."
Friday, Musk returned fire, with tweets asserting that the question was boneheaded because the analyst already knew the answer and was asking purely to advocate a negative thesis about the company.
But Barron's replayed the conference call, and argued that Musk was mistaken, reporting that "the analyst wanted to know about capital requirements, not expenditures."
I would prefer to respond to Youtuber comments over having a Wall Street putz on the phone let alone talking to one.
Just ask your average person what they would do to a Wall Street banker, then realize that few people know enough about the human body to hurt others really severely.
Gerald Ratner.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Go back to launching and landing rockets. The stock market isn't rocket science.
Unfortunately, as soon as you take your company public, this is the B.S. you get caught up in. Today's Wall Street investor doesn't give a crap if you're a super genius with world-changing ideas you're trying to gear up to sell to the world. They only care about profit and loss statements and projections for the next quarter's revenue. They're going to buy and sell your stock right along with hundreds or thousands of others, going by whatever trends they think they can spot to maximize their income on them. They really don't invest in you because they believe in your business and business model anymore.
I don't work in the financial world, so maybe some others who are will challenge my assertions here? But I do have a friend whose dad owned a big investment firm for something like 40 years. He decided to retire about 8 years ago, saying he always told himself he'd quit, the day he stopped feeling like any of the investing made sense to him anymore. And that day came.....
So on one hand, I have to kind of laugh and admire Musk here, doing what he did. It's a nice "poke in the eye" to the Financial "gods" who rule American business these days. But on the other, it really is true that he's so heavily financially leveraged with Tesla that he'd have nothing but unrealized ideas if all the big lenders and investors backed out on him.
And IMO, one thing he has working against him is that he needs to build out a massively expensive network of superchargers (and maintain them all, including the promise of free charging for many customers) - BUT he doesn't get any of the government protections that we've extended others who tried to undertake similarly massive infrastructure roll-outs (such as the cellular companies). I'm not saying he SHOULD have any of that, either! But he's trying to compete against the established gas station infrastructure that benefits almost all the other auto-makers. So he's going to NEED to stay on the good side of people with lots of money to lend him.
It's fun to watch, and if the stock dips down again I'll buy some more.
Tesla is a "buy and hold" stock in my opinion. Tesla has been doing everything possible to build for the future. I frankly don't care if Wall Street gets personally annoyed with Elon Musk's antics and the stock price dips. Nothing fundamental changed and the stock price went right back up again.
lf(1): it's like ls(1) but sorts filenames by extension, tersely
I haven't listened to the call, so I don't know what kinds of questions he was asking, but the crybaby analyst probably asked some kind of question he obviously wasn't going to get an answer to. Musk isn't there to fellate wall street, he's got enough investors that he doesn't have to... yet.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Tank it, then buy the stocks back quickly at a cheaper price.
and despite the disbelief of his colleagues he swears he was being serious.
Seems that analyst has few fans.
That said I'm becoming ever more pessimistic that Tesla can survive. They may linger for years but unless they really pull it out of the fire by the end of this year, I can't see a turnaround without a restructuring.
Pain is merely failure leaving the body
" respected Wall Street analysts...."
That is exactly how the Wall Street racket works, by selling fake expertise on the basis of reputation.
Musk's disrespect for Wall-Street is certainly warranted. Analysts claim to possess expert knowledge which will yield higher returns, when really their returns are worse than a dumb strategy such as ETFs. Retrospective comparisons of analysts picks to passive investment show analysts perform worse.
Investment firms are a scam. Do not be a sucker and a victim. Read about investment from someone who is not trying to extract money from you.
That Musk moved the price of Tesla shares by blowing off analysts just shows how many idiot investors there are. When idiots sell their Tesla stock because Musk hurt the feelings of the con artists, the smart move is to buy Tesla.
Ceci n'est pas une signature.
The main issue with Tesla is that Musk is constantly promising and NEVER delivering. People are interested in the Tesla brand and the product, but Tesla continues to under-perform and has yet to deliver in time and the delay is of an unacceptable level.
Waiting 2 years for a new vehicle is unacceptable to most with the exception of a few.
One small observation folks can disagree on but I think is valid: Musk is like Trump in that they both don't mind honest pointed criticism that is not grandstanding, dishonest or repetitive. And they both bite back hard at IYI's that are mostly out to signal for their peers or out to make themselves look good...
FWIW, I listen to a few calls a year -- they are almost always boring, fairly technical but understandable if I do some homework and very procedural -- nobody wants to fart on a call like this. Tesla's last one had a small breath of fresh air in a sense -- taking questions from the hoi polli. But that can turn into 10 minutes of positive confirmation bias real easily.
Not to inject facts into a good discussion, but the reality is that Tesla stock dropped about 2% after the call, and it's already rebounded. (If you include the part of the drop that occurred right before the call, it would be about 5%. Figure $301 to $284 and back.)
Look at the 1-month variation in this link and note that the variation after the call is about the same as four other similar variations in the past 30 days.
Big, fat hairy deal.
Also, the questions that Musk avoided weren't "sober questions by respected Wall Street analysts", they were leading questions intended to elicit a response that could be taken in a negative light. In one case, the question was answered completely by the filed papers, and illustrated that the asker didn't do his homework.
Tesla is the most shorted stock in history right now (not most shorted in todays market, by some measures it's the most shorted stock of all time), and a lot of people would like to see it fall so they can make some money.
You won't get an honest opinion about Tesla for awhile, not until the short sellers realize that they can't bring the stock down using hype.
The stock was over valued. Either buy now or bash on it with you friends and hope for more of a sell off and then buy it.
It's a good feeling stock. To be frank, Musk doesn't want to run the company anymore and would gladly hand over the reigns to anyone competent but the market doesn't want anyone but him. No one has created a car company in years. He rushed the model X to market following the standard big 3 car model of recalls... which was a disaster. He is being badgered from all sides from workers that want to unionize and the big 3 funding them to the lack of quality lithium-ion batteries at a low enough price. Lots of behind the curtain politics. The problem is it's a bet and the stock is over valued. When everything does come together he will be sitting on a solid foundation. He can't just wave a magic wand.
The problem is that Tesla is going to need to raise several billion dollars in 2018 or early 2019. If it is unable to do that, it will have to find ways to cut expenditures dramatically (mass layoffs, spinoff any division that is profitable, if there even is one, sell assets). Who is going to give Tesla billions of dollars? Institutional investors. Who cares what analysts think? Institutional investors. Profitable companies can adopt the "fuck you" attitude you are describing. But unprofitable companies can't afford to do that.
The dreams of visionaries become reality not only because of passion, but also because people with money are willing to spend it going after the dream. Tesla's dream is too big and too expensive to be achieved on enthusiasm alone. So Musk needs to court people who are able to transfer large sums of money.
By including this sig, the copyright holders of this work or collection unreservedly place it in the public domain.
Tesla is the most shorted stock on the market, with short positions covering more than 30% of the total stock available for trading. Tesla stock has been kited to a high price by its previous short squeezes. When the commitments on short positions came due, the holders had to buy Tesla stock at the prevailing price to fulfil their obligations. They had no choice. There werenâ(TM)t lots of Tesla shares available to cover the short positions, and thus the price of the stock was driven up.
What if Elon Musk was out to further kite the value of Tesla on a short squeeze, at the expense of all of the Tesla-doubters? He might act exactly as he has been: heâ(TM)d divert attention from good news, and act like a flake. Heâ(TM)d be confident in doing this, nobody could prove it was deliberate manipulation of the stock without reading his mind. Eventually, those short positions would come due, and there would be no stock to cover them, and Tesla shares would go astronomical.
Short positions like this are called âoewidow makersâ. They can wipe out investors and sometimes drive them to suicide. Elon Musk made his fortune, and continues to, by taking risky actions that other people wouldnâ(TM)t dare. He obviously has an ego, and pauperizing the shorts would fit that.
Bruce Perens.
Plenty of incredibly good business ideas are ones that need patience and time to bring to fruition. There's a need to do due diligence and make sure the company isn't just a false front, or a bunch of clueless idiots wasting every dollar they're loaned. But a company like Tesla has already proven it can deliver a working product that people find desirable. In fact, they did it several times over -- ever since the first Tesla Roadster came out.
Wall Street is destroying a lot of great ideas because they hyper-focus on short term results. If you're a big, established firm, that's probably fine. They generally sell in saturated markets where their profits are relatively stable. But for anything else, you used to have a lot of investors who bought and HELD stocks because they truly liked what the company was doing. They weren't living "quarter to quarter" to look for the first sign they needed to do a sell-off.
All the computerization of Wall Street is probably what led to a lot of this. Computer automation and ability to execute micro-trades super rapidly over high speed networks turns it into a pure game of numeric trends, vs. wishing to put your money into a business you believed in.
A classic short squeeze is developing, it is possible the shorts might lose their shirts, once again in TSLA, this time TSLA that is losing money and with bond rating in tatters. It takes a particularly monumental stupidity to lose in shorting a struggling company.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
At an ASP of $40K, that's about $18.5B in orders. That's a lot of money.
That new sofabed is as uncomfortable as it looks?
Not sure why we dont't read this anywhere, but a sales drop of over 60% YoY in Europe is quite a shocker.
https://seekingalpha.com/artic...
Signature deleted by lameness filter.
Sorry, it's only 40% YoY, the 60% is compared with Q4 2017, which probably is due to an incentive running out in Norway.
Signature deleted by lameness filter.
They might have vid up about it.
Two things:
1) The only relevant numbers are Year-on-Year because all carmakers sell a lot more in december than in january.
2) Holland had no change in incentives and no change in sales. I don't know about the other countries but Norway did change the incentives. At this point in time, electric cars still need the incentive - they still need the fact that the other cars don't have to pay for their pollution translated into cash to remain competitive. For now, because things are changing quite fast.
3) People are waiting with purchasing S and X now that the model 3 seems to finally become a reality. Same thing happens whenever Mercedes announced a new model A or C or whatever: the old stock became an immediate problem.
So: no worries yet, but model 3 production speed and conversion will be make or break for Tesla.
Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
Elon makes wild comments -> Telsa stock dropps
Elon buys up lots of Telsa stock.
Telsa does well -> Telsa stock rises.
Elon sells a little stock to fund his other projects.
Rinse & Repeat.
I am Iron Man.
Just refer to them as 'swamp Germans', to remove ambiguity.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Tesla has waiting lists on all of its models. What determines sales numbers in each markets is how Tesla focuses on production overall, and delivery to specific markets. Not the state of demand.
Model S and X are a particularly notable case because Tesla has no plans to increase annual production. Building more than 100k per year S+X would require further capital investments in 18650 cell production, and Tesla is moving away from 18650 cells. So yes, expect some month to month fluctuation, but at the end of every year, expect total global annual S+X sales to be approximately 100k.
"WANTED: Sinking ship seeks rats."
Thanks... I'll have to remember that one :)
Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
I see Tesla as a pyramid scheme. They're losing about $28,000 on each car they sell so I guess "they'll make it up in volume". :-)
There is no P/E ratio on the stock because there are no earnings.
People keep buying the stock and the cars but there seems to be no hope for profitability.
When this one crashes, it'll be entertaining as Tesla also has a monopoly on parts and service.
Although various provincials who do not live in the two most important provinces in the country dispute the fact that Holland suffices as designation for The Netherlands, people of distinction (who of course live in either South or North Holland) know that this is a false idea that needs to be disputed at every opportunity.
Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
Seems like Musk is a modern day Howard Hughes
Maybe he'll build a new building in Las Vegas like the Landmark that used to be there.. and live there.
Hundreds of years of drowning will do that.
Proper land? Ehhh...reclaimed land isn't the greatest idea is seismically active zones. Works there, not everywhere.
Also: Oh Noes, the wetlands! They couldn't do it today, malarial swamps are 'precious' to greenies.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I can't figure out how to identify [places with public J1772 chargers] on a map yet, compared to being able to find Tesla stations
FYI, there is an extremely useful web site for this:
https://www.plugshare.com/
You can find where they are, how much they cost, how much parking costs (some places have free charging but you must pay for parking, and some places you have to pay for both), how many chargers, what hours the chargers are available, and a rating from 1 to 10 for how good the charger is (10 if it's always in working order and usually available, 1 if it's always broken or always blocked or whatever).
Also, I have their app on my phone; I use it to find chargers sometimes, and I also have used it a few times to pay for charging at some J1772 chargers.
lf(1): it's like ls(1) but sorts filenames by extension, tersely