Elon, Bruh …

When Elon Musk first tweeted out an article of mine some years ago, naturally, I was ecstatic. What was also cool is that it sat at the top of his twitter feed for a few weeks and the only other things he had tweeted in a period or 2–3 months directly related to his companies (my article didn’t — it was a more generic solar power article).

That’s not how Elon tweets today. He tweets all manner of things, often joking or just having fun. He has one of the biggest Twitter feeds in the world for various reasons, but one reason is that he actually tweets company news, breaks stories, and answers questions on Twitter. Another reason may well be that he has fun there, but I’ve thought for several months that he’s toeing a somewhat dangerous line in that regard.

If Elon tweets a story of yours today, it may stay on the top of his feed for just a few hours or even a few moments rather than a few weeks, but it also drives much more traffic than it did a handful of years ago. A lot more people are watching. But that extra activity and extra attention brings with it some extra risk. Tesla is a world leader in large part because of the products it makes, but you’d have to be a fool to not acknowledge that a sizable part of the brand’s success is also due to Elon’s charisma, authenticity, brilliance, cool character, and candid, down-to-earth approach to communications. (See my 2016 article on why Elon is loved so much for plenty more on these topics.) That brand’s success and Elon’s legendary status can always crash, of course, and while I think a bit of fun and “screw the system” works in their favor, I’ve been concerned for months that they’re steering in the wrong direction.

I’ve listened to a lot of conference calls with Elon, but the one last night was a different deal. I don’t recall such an odd break in the analyst Q&A session. He has ended a call or two in an abrupt “that’s enough of this nonsense” kind of way, but I certainly don’t recall a YouTube fan (cool as he is) getting promoted to ask-as-many-questions-as-you-like status while analysts are shamed and forced to impatiently wait for their turn. It was not cool, in my opinion, and Elon could have just as easily (in theory) said, “We’re not going to answer questions on that topic right now, and we’re going to give a few minutes to a retail investor representing 150 TSLA shareholders who hold 63K+ shares ($18M+ of the stock). The questions have been crowdsourced from those investors and others.” Instead, the analysts were cut off rather rudely for asking “boring,” stupid questions and things got … weird.

As someone who is clearly “on Tesla’s side,” I thought, “Well, this looks bad. This is going to turn out bad. WTF?” Analysts were and will remain pissed. Serious people who just want to better understand the story and get whatever info they can get to paint a more complete picture are going to paint the picture without that data but some “hunches” based on how the questions were brushed off. Being nicely told that Tesla isn’t going to share that data is one thing, but being shamed for being boring while trying to do their jobs is another. Their colleagues and clients sympathize with them, and their reactions were super easy to predict. …

“Tesla is screwed.”

“We’re downgrading our guidance on Tesla.”

“What’s wrong with Tesla’s finances that Elon won’t talk to analysts and treats them like that?” (I don’t agree with the underlying assumption there, but it’s a given this is what many people will think.)

“Man, is Elon sane? Is he losing his mind? Is he actually not a cyborg?”

What I think happened, frankly, is that Elon was tired and he brought his Twitter default mode into a quarterly conference call. I think his frustration with a long-standing, misleading, anti-Tesla narrative bubbled up and he took it out on a couple of analysts trying to get their spreadsheets completed and asking questions that he didn’t think were actually important in the grand scheme of things. I think his assumption that “unconventional” and “customer focused” has always worked for him led him to overplay that hand, and I think the result could be pretty shitty.

One analyst who finally got a question in following the YouTube sideshow seemed to be super earnest, compassionate, and teacher-like in trying to explain that the broader financials chit chat isn’t just about day traders — poor communications on these topics can spook investors who really want to back Tesla, think they should, think the business is strong, and side with Elon on almost everything. Those people may have strong faith in the company, but poor communications and overly dismissive, confrontational responses to analyst questions can even spook big supporters. “So, dude, bruh, just be cool and drop us more numbers to play with.” (Not an actual quote, but may as well have been.)

As expected, mainstream media coverage of the call quickly went after Elon and Tesla. (Frankly, in an age of totally fake “fake news” claims from the president of the United States, the press is primed to fight hot shots who demean their work and the work of earnest analysts they know.)

A Bloomberg article title and subtitle:

And here’s a graph title and subtitle from that article:

A CNBC title: “Tesla stock drops as Elon Musk gives bizarre earnings call.” The two bullet-point highlights at the top were damning, but the latter was actually pretty epic in how it threw shade at the end:

• Tesla stock dropped more than 5% in after-hours trading as executives cut off Wall Street analysts in an earnings call dubbing their questions on Model 3 gross margins “boring.”
• CEO Elon Musk took several questions, instead, from Gali Russell, a 25-year-old retail investor in Tesla and Youtuber.

MarketWatch’s live blog got nasty, but I’m either unable to find those comments now or they got deleted.

I’m sure there was much more along these lines, and I can only imagine Seeking Alpha right now. Aside from all of the love for Elon, there are a ton of people who hate and envy him as well. He gave them a lot of fuel to play with last night. And to reiterate the point of the helpful analyst at the end, the fire and smoke from burning that fuel could really spook a lot of people who would otherwise support Tesla — including major investors. They may not have enough insight into the company to treat last night’s discussion as a style/personality thing, instead of a sign that shit doesn’t look good in Fremont.

We’re planning an article that pushes back on the mainstream media obsession with misleading Tesla financials claims and narratives, but man, it gets hard to change people’s understanding and overall opinion on this after a call like last night’s.

The humor is great. The fun is great. But keep communications balanced. Otherwise, you end up looking like a goofball instead of a thoughtful businessman and CEO. Even better, swing back to the style Seinfeld‘s George mastered so well in the 1990s — always leave on a good joke.