Tesla sinks after 'odd conference call that lacked answers' (TSLA)

May 03, 2018 at 08:49 AM EDT

Reuters/Bobby Yip

Tesla posted first-quarter earnings on Wednesday that topped analyst expectations.
Shares initially popped before sinking after what analysts have called an "odd conference call."
"These questions are killing me," CEO Elon Musk told "boring" analysts on the call.
Follow Tesla’s stock price in real-time here.

Shares of Tesla, which initially popped following an earnings beat Wednesday afternoon, sank as low much as 7% after CEO Elon Musk's bizarre conference in which he interrupted analysts and insulted their questions.

"Excuse me, next, " Musk said, interrupting an analyst’s question about Tesla’s need for a cash infusion, something Musk has promised the money-losing company won’t need, but has yet to convince Wall Street of.

"Boring, bonehead questions are not cool," he added. "Next."

For the first three months of 2018, Tesla posted an adjusted loss of $3.35 a share on revenue of $3.41 billion, both better than expected. Musk has continued to say the company will be profitable by the end of the year — something that has spurred doubts from analysts. The company burned through $1.05 billion in the quarter.

Ahead of the call, Musk said he would crowdsource questions from retail investors rather than only answer those from sell side analysts responsible for covering the stock for Wall Street banks. Traditionally, most questions are given to these analysts because their employers often hold sizable positions in Tesla and will be responsible for helping the company raise cash if it were to need another infusion.

"We’re going to go to YouTube," Musk said, forgoing any more analyst questions, after getting fed up with analysts' questions that were "so dry."

Joseph Spak, an analyst for RBC Capital Markets who was interrupted by Musk, said it was "an odd conference call that lacked answers to questions on investors' minds and overshadowed earnings."

RBC lowered its price target to $280, from $305, following the results. Wall Street on the whole remains slightly more optimistic with an average price target of $319, just 5% above where the stock was trading Thursday morning.

The overnight slump brings Tesla back below the key $300 resistance level that it has been flirting with for months, amid heightened volatility thanks to a fatal crash, "production hell," plunging bond prices, and a credit downgrade from Moody's.

"I just left the call very frustrated," Rebecca Lindland, an analyst at Kelley’s Blue Book told CNBC Thursday morning. "Elon, you’ve got to grow up. You’ve got to stop looking at shiny objects and you’ve got to get on track. You have to take analyst questions, adult analyst questions, not fanboys, not retail analysts."

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