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'M-A-R-S'! A Disillusioned Wall Street Picks Up The Pieces After Elon Musk's 'Downright Bizarre', Extraterrestrial Conference Call

"Why you doin' this man? I thought you was my brother, why you askin' me questions like that?"
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If Elon Musk was trying to amuse himself at the expense of the analyst and investor community with his performance on Tesla's Q1 call Wednesday evening, it's mission accomplished to the extent he's amused by befuddlement and frustration.

On the off chance you missed the call, you can read our full take here or you can just watch the following summary:

Why you doin' this man? I thought you was my brother, why you askin' me questions like that? Ok, fine, I'll answer your stupid ass question. I feel like you people keep tryin' to distract people with shit like capital requirements when I'm focused on other things, namely the moon.

Amusingly that sounds a lot like a few of Wilbur Ross's most recent CNBC cameos so who knows - maybe we're all just dense and Elon and Wilbur are the only people who really get it.

But in the interim period between now and everyone gettin' up on Elon's level, folks are confused as shit with the most hilarious example being Morgan Stanley's Adam Jonas.

We brought you excerpts from his initial take on Wednesday evening when, in the course of evaluating the actual numbers, he said there was “little in the release that changes the market’s view that TSLA needs external capital” before suggesting that while Tesla probably doesn’t represent a particularly “attractive investment on a risk-adjusted basis at $300”, there’s “rather limited downside”.

To that we quipped:

Yes, “rather limited downside” – unless of course Elon does something crazy like lose his shit on the call, which, as it turns out, he did.

Well overnight, Jonas was out with his take on the call and he was - how should we put this? - disillusioned.

Before we get to that, allow me to just excerpt the entire exchange between Elon and Jonas from the call because it is comedy gold in its own right. Here you go:

Adam Michael Jonas - Morgan Stanley & Co. LLC

Thanks. Elon, so you repeatedly said I think in recent weeks that you do not need to issue equity capital at Tesla, and I think many investors on this call would say it's better to raise capital when you don't need to. So I guess the first question is...

Elon Reeve Musk - Tesla, Inc.

I disagree.

Adam Michael Jonas - Morgan Stanley & Co. LLC

Yeah, you may not need to, but do you want to?

Elon Reeve Musk - Tesla, Inc.

No. I specifically don't want to.

Adam Michael Jonas - Morgan Stanley & Co. LLC

Perfect. Okay. My follow-up, Elon, is your cars produce currently a large amount of data, and SpaceX gets into the satellite broadband business next year somewhat...

Elon Reeve Musk - Tesla, Inc.


Adam Michael Jonas - Morgan Stanley & Co. LLC

Yeah. Okay. (23:19).

Elon Reeve Musk - Tesla, Inc.

Not next year, but it's probably three years.

Adam Michael Jonas - Morgan Stanley & Co. LLC

Okay. Three years.

Elon Reeve Musk - Tesla, Inc.


Adam Michael Jonas - Morgan Stanley & Co. LLC

Thank you for that. Some argue that SpaceX could offer Tesla a resilient cyber secure pipe for this precious vehicle data and a potential competitive advantage. So, Elon, isn't bandwidth an obvious domain for collaboration between Tesla and SpaceX one day?

Elon Reeve Musk - Tesla, Inc.

I mean, it might be. There's lots of interesting things you could do. The cars got a lot of computing power, and it's connected to the cell networks and Wi-Fi and everything. And we could certainly connect it to LEO Internet constellation. I haven't thought about it, but probably you're right.

Adam Michael Jonas - Morgan Stanley & Co. LLC


Martin Viecha - Tesla, Inc.

Thank you. Let's go to the next question, please?

Yeah. Just, yeah.

Jonas thought that response to the SpaceX/Tesla collaboration prospects was a bit off-putting and here's what Adam had to say about it in his overnight missive which found him describing the Tesla call as "arguably the most unusual I have experienced in 20 years on the sell- side":

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.” A surprising answer from someone who launched a Tesla Roadster into outer space on a SpaceX rocket.

Right. Or maybe what's "surprising" is that people haven't taken a more skeptical approach to Musk given that he is in fact "launching Roadsters into outer space on rockets." That's the kind of thing that should make sane people who aren't star-struck (figuratively and literally in this case) question a man's focus and commitment to terrestrial concerns like say, protecting the solvency of an enterprise.

But like Wilbur, everyone seems to be fascinated by "that little red Tesla hurtling off to an orbit around the sun and the moon."

But maybe not for long.

Because as Jonas goes on to write, "irrespective of the Tesla CEO’s annoyance with the genre of questions he was receiving from the analyst community, we note that an important part of Tesla’s success has been its relationship with the capital markets in funding its ambitious plans [and] the analysts on the call represent the providers of capital that Tesla has throughout its history depended upon."

Ohhhhhh - sick burn, Adam.

And Jonas was hardly the only analyst feeling a bit jaded on Thursday after Elon sent all the high-rollin' VIPs to the back of the line and let all the broke virgins behind the velvet rope with the following deft exchange:

Joseph Spak - RBC Capital Markets LLC

Thank you. The first question is related to the Model 3 reservations, and I was just wondering if you gave us a gauge as maybe some of the impact that the news has had. Like, of the reservations that actually opened and made available to configure, can you let us know, like, what percentage have actually taken the step to configure?

Elon Reeve Musk - Tesla, Inc.

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

JPMorgan described the call as "truly bizarre" and RBC (who is likely to be especially irritated given the above), described the exchange as "odd" and suggested Musk has "shaken confidence".

For their part, Barclays decided to use this as an opportunity to compare Musk to Bezos. Check this out, from a note out overnight:

The Ugly: that call was downright bizarre…and reminds you why Elon and Jeff Bezos are different

We're not going to rehash the call - we're sure by now you’ve caught the multitude of tweets or media commentary. Frankly, we’re lucky to have gotten in a question on a ‘boring item’ of takt times / factory staffing before such questions were dismissed.

But let's just say that Elon’s behavior on the call should give even the uberbulls pause.

And the final, yet most important, Tesla/Amazon comparison. Amazon CEO Jeff Bezos has prided himself in the past on only spending 6 hours a year talking to investors. He doesn’t partake in earnings calls and he only talks to sticky investors. Elon Musk appears to want to pursue this path in dealing with Wall Street, in our view.

Yet the difference between the two – whereas Jeff Bezos never needed Wall Street to fund Amazon’s growth plan, Elon Musk has needed Wall Street to fund Tesla’s growth, having tapped Wall Street for $12bn in fund raises over the years, and will likely continue to need Wall Street to fund his growth.

And see, there it is again: Elon is biting the hands that feed him or, perhaps more aptly, torching those hands with a flamethrower from "The Boring Company."

Whatever the case, it's probably safe to say that Elon and Wall Street are going to have to agree to disagree on this for the time being and if I had to guess, no one is going to shut Elon out of capital markets completely.

After all, when he colonizes the moon he'll have a monopoly on all the good Martian real estate, so he'll be a good friend to have if you want to be the first investment bank to set up shop across from the Schiaparelli crater.



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