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According to Business Insider
- Tesla CEO Elon Musk took to Twitter Friday morning to once again confront skeptics of his company.
- The tweetstorm followed a combative earnings call on Wednesday that saw Musk ignore questions posed by two analysts.
- It’s just the latest chapter in Musk’s contentious relationship with Tesla bears and short sellers, who he has excoriated in the past.
- Watch Tesla trade in real time here.
Of particular scorn to Musk were the two analysts he cut off on Tesla’s quarterly earnings call on Wednesday — one from Bernstein, and the other from RBC Capital Markets.
“The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors,” he tweeted.
He then singled out the questions posed by either analyst and explained the issues he has with them:
“The reason the Bernstein question about CapEx was boneheaded was that it had already been answered in the headline of the Q1 newsletter he received beforehand, along with details in the body of the letter,” Musk said in a follow-up tweet.
RBC Capital Markets:
“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,” he tweeted.
With his pointed comments on social media, Musk is doubling down on the defiant attitude he displayed on Wednesday’s earnings call — one that infuriated analysts across Wall Street. At one point, the CEO lamented that “boring questions are not cool,” while also mentioning “barnacles, flufferbots, and bonehead bears.”
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
It’s all on-brand, because if Tesla enthusiasts know anything about Musk, it’s that he loathes short sellers. Over the past year, he’s forged a combative relationship with them, calling them “jerks who want us to die” in a Rolling Stone profile last year, and describing their behavior as “hurtful.”
Further, Musk fired off a tweet last June in which he said short sellers “want us to die so bad they can taste it.” In early April, after a period of considerable stock strength, the CEO even went as far as to taunt Tesla’s detractors, tweeting, “Stormy weather in Shortville.”
And despite his myriad efforts, Tesla remains the most popular short in the US equity market, a designation it’s held for much of the past two years. Short interest — a measure of bets that a stock will drop — sits at a whopping $11 billion, outpacing the next-most-shorted company, Apple, by more than $1.5 billion, according to data compiled by financial analytics firm S3 Partners.
While Tesla certainly has its share of skeptics, another explanation for the exorbitantly high level of shorting activity is that the company and its mega-cap tech peers are being used as proxies to hedge against the broader stock market, according to S3.
That includes the likes of Apple, Amazon, Netflix, Microsoft, Facebook, and Alphabet, which are all included in the most-shorted list above. The wisdom behind the hedging strategy is that as these huge, influential stocks go, so does the market — so taking a short position in them means protecting against an index drop.
Finally, roughly two hours after his initial tweet, Musk capped his rant with a wink and a nod towards one of the most commonly cited headwinds facing the company: its rapid cash burn.
Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time.
— Elon Musk (@elonmusk) May 4, 2018
We’ll be updating this story as Musk keeps tweeting. Check back here.
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