Elon Musk's Most Dumbfounding Moments on Tesla's Earnings Call

(Bloomberg) -- Elon Musk's usually chummy relations with Wall Street just took a troubling turn.

During a highly unusual earnings call, Tesla Inc.'s chief executive officer cut off analysts and got defensive about probing questions pertaining to the electric-car maker's finances. The company burned through more than $1 billion for the third time in four quarters.

Musk, 46, said he won't need to go back to equity or debt markets this year to seek additional funds for Tesla, but crossing Wall Street may be a bad idea. The billionaire wooed investors into buying $1.8 billion worth of bonds in August, which fell within a week. Five months earlier, Tesla sold about $1.25 billion worth of stock and convertible debt.

Here were some of the most head-scratching moments of the call:

Don't make a federal case

Musk aimed his sharpest words at Toni Sacconaghi of Sanford C. Bernstein, who rates Tesla the equivalent of a hold. After the analyst asked a question about whether the company could reach its 25 percent gross margin target on the Model 3, Chief Financial Officer Deepak Ahuja said recently imposed tariffs, more expensive commodities and higher labor costs factored into the company's guidance.

“Yeah, but we're talking about a 3 percent to 5 percent difference, and that's something that we'll solve like within three months to six months later,” Musk said. “So don't make a federal case out of it.”

Boring, Bonehead Questions

Sacconaghi pressed ahead with another query about Tesla lowering its 2018 capital expenditure projection to $3 billion, from $3.4 billion. Ahuja said the carmaker would spend less by simplifying its approach to automation and curtailing infrastructure outlays.

“And so where specifically will you be in terms of capital requirements?” Sacconaghi said.

“Excuse me. Next. Next,” Musk said to the call operator. “Boring, bonehead questions are not cool. Next?”

So Dry

Musk wasn't done putting down analysts. Joe Spak of RBC Capital Markets followed with an inquiry about how many Model 3 reservation holders were actually taking the step to configure their car when invited to do so.

After a pause, Musk said “We're going to YouTube,” referring to the owner of a channel on the video-streaming service who lobbied the CEO ahead of time for the chance to ask questions on behalf of retail investors.

“Sorry,” Musk said, “these questions are so dry. They're killing me.”

Do Not Buy

Near the end of the call, Musk was blunt with Ben Kallo, a Robert W. Baird & Co. analyst who prefaced a question by saying he understood the CEO's frustration for “how myopic we are right now.”

Kallo, who rates Tesla a buy, encouraged Musk to give more updates about progress making Model 3 sedans, in order to help the company's stock.

“I think that if people are concerned about volatility, they should definitely not buy our stock,” Musk replied. “I'm not here to convince you to buy our stock. Do not buy it if volatility is scary. There you go.”

Don't Be Lame

One set of questions from the YouTube host, Gali Russell, was about Tesla's supercharger network and whether it should be available to other automakers -- as Musk has suggested -- or kept as a strategic moat.

“First of all, I think moats are lame,” Musk said. “They're like nice in a sort of quaint, vestigial way. But if your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness.”

To contact the reporter on this story: Dana Hull in San Francisco at dhull12@bloomberg.net.

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters

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