Elon Musk. (Getty Images)

  • Tesla CEO Elon Musk conducted a deeply strange earnings conference call with analysts after the company reported Q1 earnings.
  • At one point, Musk cut off an analyst and turned the call over to a YouTuber.
  • Musk labelled questions about Tesla's business issues "boring" and dry."
  • Tesla's stock plunged in after-hours trading.

I've listened to a lot of earnings calls with automakers and more than my fair share of Tesla calls, presided over by CEO Elon Musk with a mixture of cheerleading and contempt. On Wednesday night, after Tesla reported it first-quarter results, I was treated to easily the most bizarre Muskian performance yet. 

Earnings calls, as anyone in the financial media will tell, tend to be the audio equivalent of chewing steamed broccoli. You have to seriously enjoy accounting, and truthfully, there's serious value in that. Say what you will about short-term thinking — quarterly results at least provide us with a sort of pulse on a company's health.

Or in Tesla's case, lack of fitness. Musk's 15-year-old carmaker and energy company has not posted an annual profit in the 15 years it's existed, but the first quarter of 2018 set a new standard for money-losing: minus $710 million. Tesla is mired in a messy production ramp for its Model 3 sedan and spending cash at a staggering clip to right the ship and — if Musk is to be taken at his word — swing to profitability by the second half of the year.

READ: This SA-born entrepreneur is helping to build a 'Tesla killer' – a car fully powered by the sun

Musk used to barely tolerate earnings calls, using them as an opportunity to meander through some his favorite futuristic talking points while providing fairly limited opportunity for his CFO to do what CFO's usually do on carmaker chats with analysts from the big investment banks, which is to get down in the weeds with various arcane questions related to stuff like exchange rates, cash flows, profitability targets, and dividend objectives.

A CEO like General Motors' Mary Barra might see this is an opportunity to provide detail on how GM is running its business. Musk doesn't like it when Wall Street asks him how he's running his business because, if you go by the numbers, he's running it quite badly. Musk also thinks Wall Street is good for basically one thing, which is raising money for him to spend. 

That's the deal, and consequently, Tesla's calls tend to lack cordiality, wit, or any sense that Tesla and, say, Morgan Stanley or Goldman Sachs are in the financial game together.

What happens when a call goes off the rails

Markets Insider

But Musk took the often toxic relationship in an entirely new direction Wednesday night when in response to a lightly confrontational query from Sanford Bernstein's Toni Sacconaghi about Tesla's cash-burning expectations provoked Musk to call it a "boring bonehead question."

That was it for Sacconaghi. Next up was Joe Spak from RBC Capital Markets, who asked about Model 3 reservations and how many of Tesla's approximately 400,000 pre-order holders who are able to configure their vehicle have taken that step.

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

READ: A teenage Elon Musk once casually sold his father's emeralds to Tiffany & Co. while his dad was sleeping

Enter Galileo Russell, who owns some Tesla stock, has a YouTube channel about Tesla, and had asked Musk via Twitter to be included on the call to represent retail investors earlier in the week and was given the OK.

What followed was notable for Russell's sycophantic enthusiasm for Tesla's products, both new and promised, and evident lack of interest in anything materially connected with actually investing in Tesla. He also likes the word "awesome," and Musk liked his questions. The exchange went on for longer than any I can remember with a sell-side analyst.

Did Musk have his Skilling moment?

Jeffrey Skilling. (Johnny Hanson,Getty Images)

The stock promptly fell below R3,800 ($300) in after-hours trading, after topping that level prior to the earnings report. On Thursday, it was routed in pre-market action, down 8% to R3,520 ($278); it opened down 7% to R3,545 ($280). Commentators pointed out that Musk might have experienced his Skilling moment — a reference to a 2001 exchange between a pre-incarcerated Enron CEO Jeffrey Skilling and Richard Grubman of Highfields Capital Management, in which Grubman asked Skilling why he couldn't see Enron's balance sheet and Skilling called Grubman an asshole.

Musk has always been an outside-the-box CEO, but investors were understandably spooked, although the call returned to a moderate semblance of normality when some bank analysts returned to the question queue. But the damage had been done, in what at first looked like a holding-pattern quarter in which Wall Street could reward Tesla for losing a bit less than expected and turn its attention to assessing Musk's ability to wrangle Tesla's ambitious Model 3 production goals — 5,000 units weekly by the end if June — and digest his insistence that it wouldn't need to raise new funding in 2018.

Musk is no stranger to talking Tesla's stock down, so at some level he could be borrowing a page from the Donald Trump playbook and engaging in crazy-like-a-fox behavior. He also made time on the Wednesday call to excoriate journalist for writing negative things about Tesla's Autopilot semi-self-driving technology following a fatal accident involving the system last month.

Don't overthink it — Musk hates Wall Street

Maybe he thinks Tesla's R633 billion ($50 billion) market cap is a liability and should take a dip, just to ease up the pressure on the company. I think it's more likely that he's just sick of the detail that analysts are seeking. You can't really blame them for digging; Tesla's is a small company with limited global reach, serving a niche market, and losing vast amounts of money at a time when every other automaker is raking in cash amid a sales boom in the US and massive growth in China.

But episodes like this invite overthinking. Is Musk, you know, feeling OK? He is trying to run multiple companies (SpaceX wants to go to Mars) and has taken to sleeping on the factory floor at Tesla's plant in California.

In fact, he seems fine. The gloves are off. Wall Street works for him and he genuinely is bored with all the short-term questions. Maybe he'll go back to the markets to raise money and maybe he won't. Nobody has to buy the stock. Professional analysts are no better in his mind than some guy with a YouTube channel and a Tesla obsession. 

Reality bites. Sure, it could put a hurtin' on Tesla shares. But if you think that matters to Elon, you don't know Musk.

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