Musk's bizarre earnings call was 'the most unusual' in this Morgan Stanley analyst's 20-year career

Key Points
  • Elon Musk stuns analysts in his post-earnings conference call by dismissing many of their questions about Tesla as "stupid" and "boring."
  • Morgan Stanley analyst Adam Jonas says it was the "most unusual call" in his 20-year career on Wall Street.
  • Tesla shares slump in the fallout, with key questions remaining over the company's outlook.
Tesla's shares drop as Musk gives bizarre earnings call

Elon Musk's peculiar post-earnings call was the talk of the market Thursday morning, with one analyst ranking it among the strangest moments of his career.

"Tesla's 1Q18 analyst conference call was arguably the most unusual call I have experienced in 20 years on the sell-side," Adam Jonas, equity analyst at Morgan Stanley, said in a note to clients. "Many investors we spoke with post the call agree."

It's anything but the normally amiable affairs between the CEO and those who follow his company closest.

Amid questions over the electric car maker's cash burn, its relationship with SpaceX and production of the Model 3, Musk cut off the questioners and in some cases chastised them for asking things he didn't like.

Elon Musk slams 'boring, bonehead' analyst questions on Tesla earnings call

He dismissed one question from a key analyst as "boring," then took more than 20 minutes of questioning from a 25-year-old YouTuber.

"We're going to go to YouTube. Sorry. These questions are so dry. They're killing me," Musk complained.

And that wasn't all.

"We asked about the scope of collaboration between Tesla and SpaceX on data, to which Mr. Musk said, 'there are many areas for us to collaborate … haven't really thought about it,'" Jonas said. "A surprising answer from someone who launched a Tesla Roadster into outer space on a SpaceX rocket."

The fallout from the call has not been good.

Tesla shares fell more than 7 percent in premarket trading Thursday as the impact of Musk's evasiveness sank in. The impact was felt across the sector, with tech shares overall pointing lower.

It was about more than just comity between CEOs and analysts.

Jonas said there are important questions about where Tesla is heading, considering the high levels of company debt and questions about the ability to meet production expectations.

"While the consequences are unquantifiable, we believe Tesla's CEO made a mistake in refusing to answer some of the analyst questions about the Model 3 ramp," he wrote. "Additionally, we found the posture out of character with the normally inviting, enlightening tone of prior conference calls over many years. While they may be 'dry' in nature, we argue such questions are extremely important for a highly levered and cash hungry company with 2025 bonds trading at 89."

The "path of the Model 3" is critical to the analyst's bull case of $561 for the stock and bear case of $175, he said. The bull case represents 86 percent upside while the bear case would translate to a 41 percent decline.

As things stand, Morgan Stanley has a $376 price target on Tesla, which would be 25 percent higher from Wednesday's close.

Tesla did not immediately respond to a request for comment.

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