Published 6:14 am, Wednesday, May 9, 2018
- RBC Capital Markets analyst Joseph Spak defended his earnings call question that was interrupted by Tesla CEO Elon Musk last week.
- “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,” he said in an open letter.
- Follow Tesla’s stock price in real time here.
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One of those analysts interrupted by Musk defended his line of questioning in an open letter on Wednesday.
“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,” RBC Capital Markets’ Joseph Spak wrote.
“As an analyst, my responsibility is to be well informed when I discuss Tesla’s stock with current and potential investors,” he said. “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.”
He added: “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.”
On Tesla’s first-quarter earnings call last week, Musk interrupted Spak’s question about Model 3 reservations and what percentage of those potential buyers had declined to actually configure and take delivery of their car. The $1,000 deposit is fully refundable, the company’s website says.
“We’re going to go to YouTube,” Musk responded. “Sorry. These questions are so dry. They’re killing me.”
Instead of answering the “dry” question, Musk opted instead to take a question from self-proclaimed Tesla and bitcoin enthusiast, Galileo Russell, who asked for an update on Tesla’s car-sharing network that rivals competitors like Waymo or Lyft.
In Wednesday’s letter, Spak offered more questions for Musk, including clarification on labor issues, future capital expenditure plans, and the “production hell” plaguing Tesla’s Fremont factory that have weighed on Tesla’s stock price in recent months.
A Tesla spokesperson did not immedeately respond to a request for comment.
Despite the unusual call, RBC maintained its “sector perform” rating, with a price target of $280 — roughly 7% below Tuesday’s closing price. The firm also invited Musk to host a webinar with clients to “dispel any investor misconceptions” he may perceive.
“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,” Spak said.
“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!”
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