Published: Sun, May 06, 2018
Finance | By Gustavo Carr

Elon Musk accepts his move to snub Tesla analysts was 'foolish'

Elon Musk accepts his move to snub Tesla analysts was 'foolish'

SpaceX founder Elon Musk pauses at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, US, February 6, 2018.

S&P Investment Advisory Services portfolio manager Erin Gibbs and Belpointe Asset Management chief strategist David Nelson discuss how Tesla CEO Elon Musk cut off questions asked by analysts during a conference call. When questioned on the Model 3 by an analyst, Elon Musk cut him off, calling questions dry and "not cool". (TWTR) early Friday with a series of tweets justifying his bold behavior on Thursday's call, in which he dismissed some analysts' questions and redirected others to a pro-Tesla YouTube blogger. The executive has been critical in the past of investors who "short" Tesla shares, meaning they are betting that the stock will decline.

The two analysts were not immediately available for a comment.

The gaffe could be especially painful as Tesla might need to jump back into the capital markets to subsidize Model 3 production. On Thursday, the company's shares ended down 5.5%, trading at $284.45. And the future financial needs of the automotive company still remained open.

"With over $11 billion of total short interest in Tesla, many traders are either at or close to their risk limits and will not be able to increase their positions substantially".

Tesla gained 3.4% to $294.09 on Friday.

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Sacconaghi has a US$265 price target on the stock, while Spak sees the shares falling to US$280.

"That has an impact but it's not something that will prevent them from raising capital", Houchois said.

As for whether this is the last of Musk's unusual behavior, that seems unlikely.

"The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors", Musk explained. "They are actually on the *opposite* side of investors", Musk added in a follow-up tweet.

Next, Musk was asked many questions by Galileo Russell, a 25-year-old retail investor, and owner of a YouTube Channel. The weird call yielded scathing comments from analysts and at least three brokerages cut price targets on the stock. "We wonder what spending is deferred and for how long", CFRA analyst Efraim Levy wrote in a note to investors.

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