Published: Sun, May 06, 2018
Finance | By Cynthia Curry

Tesla Almost Out of Stock - For Short Sellers

Tesla Almost Out of Stock - For Short Sellers

Musk during the earnings call also said that the Model Y will need to be produced at a new plant, as the Fremont plant was "jammed to the gills" and "crazy packed" with production of the Model 3, Model S and Model Y.

Even though they have received 4,50,000 reservation for Model 3 at the end of first quarter, the current production rate is 2,270 units per week which is very low and they are planning to increase it to 5000 units in next two months to keep the cash flow going. "We're going to go as long as there are good questions to answer", he said of the question and answer phase of the call.

He said that the questions had come from "sell-side analysts. trying to justify their Tesla short thesis".

Tesla Inc (TSLA.O) Chief Executive Officer Elon Musk said on Friday it was "foolish" of him to snub Wall Street analysts on a post-earnings conference call on Wednesday.

Tesla tore through $745.3 million in cash in the quarter, due largely to the slow production ramp-up of the Model 3 mass-market electric sedan.

Tesla's next model bound for production is the Model Y, a small SUV related to the Model 3. During the call, Musk shot down a question from Sanford C. Bernstein & Co. analyst Antonio Sacconaghi about capital investment requirements. This means that some are betting Tesla's shares will fall, and they stand to gain if the share price drops.

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Jefferies analyst Philippe Houchois said the underlying business fundamentals were more important in any capital raise, although "management credibility" was also a factor.

When a Twitter user suggested that Musk could have blocked the analysts from speaking on the conference call, the Tesla founder responded, "True". But short sellers, who shorted almost 400,000 shares on Thursday, doubled that amount on Friday, according to financial analytics firm S3 Partners.

Tesla shares to lost more than five percent after the call. They expected Tesla to report a loss of $3.54 per share on revenue of $3.28 billion.

Musk opted to explain his side on Twitter early Friday.

Sacconaghi wrote in a note on Thursday that "we do worry that such theatrics will unnecessarily undermine investor confidence in Tesla's outlook". On the call, he devoted 23 minutes to 25-year-old Tesla investor, Galileo Russell, who runs HyperChange TV.

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