Dissed Tesla analyst challenges Elon Musk to a public do-over

Elon Musk with pop star Grimes at the 2018 Met Gala in New York on Monday.
(Angela Weiss / AFP/Getty Images)

One of the Wall Street analysts whom Elon Musk cut off on an earnings call last week for what he called their “boring,” “dry” and “bonehead” questions has asked Musk to consider a redo.

“We as analysts need to ask probing questions … to give our clients confidence we aren’t simply gazing into a crystal ball,” RBC Capital Markets equity analyst Joseph Spak said in an open letter to Musk he distributed in a research note Wednesday morning.

Spak laced his invitation with honey: “I would be elated to host you for a webcast or call to talk extensively about all the amazing industry innovations you are driving and dispel any investor misconceptions you perceive.”

But he also included tough questions about Tesla’s current production problems and near-term finances. “Anyone looking to invest in Tesla’s future must first be comfortable with its present,” he said.


“Every one of your major shareholders” would participate in the session, Spak pledged.

The earnings conference call on May 2 created a stir after Musk, Tesla’s chief executive, cut off Spak and Bernstein analyst Toni Sacconaghi, who asked about Model 3 reservations and capital spending plans.

Musk then spent more than 20 minutes answering questions lobbed by the host of a Tesla fan site on YouTube.

Two days later, Musk tweeted “The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short-seller thesis, not investors,” referring to Sacconaghi and Spak.


Both analysts see potential upside in Tesla stock, and neither has expressed support for a “short-seller thesis.” Short sellers make money when a stock goes down; the deeper it dives, the more money they make. A sell-side analyst works for firms that underwrite, promote or trade companies’ shares; a buy-side analyst susses out shares for institutions that buy shares.

Sacconaghi appeared Thursday on CNBC and said, “This is a financial analyst call. This is not a TED talk, so when financial questions are asked, they should be addressed.”

Musk later said that cutting off the analysts’ questions was “foolish.”

Among the topics Spak wants to discuss with Musk:

Model 3 reservations. Spak wants to know if more Model 3 reservation holders than expected are holding off for the not-yet-available all-wheel-drive version.

Factory workers. Musk said he’ll be adding 400 workers a week for several weeks to Tesla’s Fremont, Calif., assembly plant to make up for problems caused by installing too much automation, even as he’s ordered a purge of low-performing temporary workers whom he calls “barnacles.” Spak wants to know how much of an effect the temporary additional labor is having and how quickly Tesla can “wean off it.”

Capital spending. Tesla has reduced capital spending plans. Spak wonders how long Musk needs to see sustained Model 3 production before reevaluating those plans.

Model Y. Musk has pushed planned production of the crossover Model Y from 2019 into 2020. Spak wants to know “with no room at Fremont and significant capex only starting next year, how do we gain confidence that Model Y production begins early 2020?”


Asked about Spak’s invitation, a Tesla spokesman said, “no comment.” An RBC representative early this morning sent The Times an unsolicited invitation to speak with Spak, but Spak has yet to call.

Twitter: @russ1mitchell