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“Dear Elon”: Analyst Cut Off By Elon Musk Says Will “Hold Tesla Accountable”

Courtesy of ZeroHedge. View original post here.

One week ago, Elon Musk entered the history books for his unprecedented, petulant handling of "boring, boneheaded" questions from two sellside analysts, who merely wanted more details about the company chronic cash/rollout issues.

And no phrase captures Musk's descent better than "These questions are so dry. They're killing me."

That's what Musk told RBC analyst Joseph Spak in response to a question about Model 3 reservations.

Then, after TSLA stock tumbled as investors started to get increasingly worried about Musk's mental state, Tony Stark responded on twitter, offering his trademark non-apology apology:

Reason RBC question about Model 3 demand is absurd is that Tesla has roughly half a million reservations, despite no advertising & no cars in showrooms. Even after reaching 5k/week production, it would take 2 years just to satisfy existing demand even if new sales dropped to 0.

— Elon Musk (@elonmusk) May 4, 2018

But while Musk may have moved on, especially after purchasing $10MM worth of Tesla stock in the premarket on Monday, strategically picked for its thin volume allowing Musk to manipulate and reset the stock price back above $300, if not the bonds which have continued to tank…

… the RBC analyst had not, and this morning Joseph Spak wrote an open letter to the Tesla CEO, which starts as follows:

Dear Elon,

Last week was a doozy, huh? I don’t know about you, but I've spent the days since the call reflecting on our interaction and talking to many of the insightful institutional investors who own your stock. My conclusion? Tesla remains an amazing company with a compelling long-term opportunity and an incredible list of accomplishments already under its belt.

Having been mocked by Musk apparently not impair Spak's research enthusiasm, who adds that he continues to "hold Tesla accountable"

But I continue to hold Telsa (and every company I cover) accountable for implementing a strategic vision that aligns with an ability to execute at scale.

Spak then continues laying out what he is expected to do versus what Musk believes a sellside analyst's job is:

As an analyst, my responsibility is to be well informed when I discuss Tesla’s stock with current and potential investors. A financial results call is an opportunity for Wall Street to re-calibrate our expectations based on the information you provide, so we can thoughtfully reflect on the financial outlook for your company. Our questions collectively represent the concerns and interests of your current and potential shareholders. 

The analyst then gambles by assuming that Musk can appreciate why someone might not be unabashedly euphoric about the prospect of throwing away money at a company that burns several million every day before breakfast.

Some of these questions can seem dry, boring or short-term focused, but hopefully you can appreciate that anyone looking to invest in Tesla’s future must first be comfortable with its present. We as analysts need to ask probing questions about balance sheets and production and other such topics to give our clients confidence that we aren’t simply gazing into a crystal ball.

And the punchline: Spak's offer to Musk – let's Q&A it out, bitch… ideally in one to one setting so that the RBC analyst can extend his 15 minutes a little longer:

Don’t get me wrong. I love talking and thinking about the big picture and what Tesla can become. That’s what makes Tesla such a fascinating company to cover! I would be elated to host you for a webcast or call to talk extensively about all the amazing industry innovations you are driving and dispel any investor misconceptions you perceive. Name the time and the place and I will be there, along with every one of your major shareholders.

In the meantime, Spak left Musk "with a few of the questions that shareholders and analysts would still like to hear more from you on" which are as follows:

  • If the 2019 converts remain out-of-the-money, how do you plan to address the capital structure?
  • Are more Model 3 reservation holders than expected deferring and if so is it for the AWD variant? Is that what supports higher ASP commentary?
  • How much of an impact is the temporary additional labor and how quickly can you ween off it?
  • How long do you need to see sustained Model 3 production before reevaluating capex plans?
  • With no room at Fremont and significant capex only starting next year, how do we gain confidence that Model Y production begins early-2020?

Spak concludes by advising Musk that "I look forward to continuing our conversation." It's certainly not reciprocated.


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