Tesla's Earnings Call Was a 'Train Wreck,' Says Ives

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Bloomberg Jan 25 13:36

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Transcript

  • 00:00 We were dead wrong expecting Musk and team to step up like adults in the room and give a strategic and financial overview.
  • 00:06 Instead we got a high level test, the long term view with another train wreck of a conference call.
  • 00:12 Dan Ives not holding back, he joins us around the table.
  • 00:14 Dan, good morning to you.
  • 00:15 No,
  • 00:15 great to be you sound disappointed.
  • 00:17 Look, I mean we are did
  • 00:18 this was an important call where Musk and the rest of the team need to step up adults in the room give some guidance in terms of what's happened on pricing,
  • 00:28 the margin pressure
  • 00:29 strategically
  • 00:31 and
  • 00:32 I do look I'd say train wreck would probably be soft because this was one where the long term stories intact but in the near term they needed to navigate communicate they didn't do that.
  • 00:42 You'll see a lot of pressure on the stock dreadful assessment stock is allowed by something like 7% in the pre market.
  • 00:47 Have you changed your call on the name?
  • 00:49 OK.
  • 00:49 We're still bullish, but no, from a fair value perspective, I mean 350 goes toward probably lower threes 3, three and 15
  • 00:57 from a base perspective because numbers going to come down.
  • 01:00 And the biggest issue here is that you didn't give goal posts
  • 01:04 because by not giving goal posts now the street the Bears are going to run with it.
  • 01:08 And look the Bears won last night.
  • 01:10 The long term story is intact in terms of FSD, in terms of the if you're a believer in EV which we are a trillion dollar market I do believe is on the horizon next few years.
  • 01:21 But in the near term,
  • 01:22 I mean this is 1 where
  • 01:25 it's it's a glass half empty relative to how they talked about it.
  • 01:29 I mean this was sort of a 101 not to how not you know how to do a conference call.
  • 01:34 I want to understand what the threshold is for you to say sell
  • 01:37 because we have Elon Musk who just said, as you said, a train wreck of a conference call was not the adults in the room.
  • 01:42 He wants 25% of Tesla or else he's going to walk and go develop some sort of robotics company.
  • 01:47 If he gets 25% of Tesla shares, do you say sell?
  • 01:51 Look, I think first I I view that as sort of impossible here.
  • 01:54 There's not going to be a dual class situation from the share perspective.
  • 01:58 Plus he did sell, he had 22% ownership before buying Twitter.
  • 02:03 So a part of that in terms of
  • 02:05 there the board will have some sort of comp package
  • 02:09 right now that it's, it's caught in a legal issue in terms of Delaware.
  • 02:13 But I think if he gets more voting control that's something that's going to ruffle feathers.
  • 02:18 But also the problem here is that
  • 02:19 the planes crashing in the near term and you're talking about salted or unsalted pretzels.
  • 02:25 And that's, and that's the biggest problem relative to what's happening in Tesla's that investors want to have
  • 02:31 some guidance,
  • 02:33 give me some financial parameters.
  • 02:35 And you didn't get it.
  • 02:35 Look, and we're and obviously we're huge firm believers and that's the frustration.
  • 02:39 Well, OK, as a firm believer then what does it do to you?
  • 02:43 The Elon Musk came out and basically said, I don't care if this company makes money.
  • 02:46 I mean, I'm paraphrasing, but he said I'm not looking for additional economics, read more money.
  • 02:51 I just want to be an effective steward of very powerful technology.
  • 02:54 Does that bother you?
  • 02:55 OK, I think in some ways the autonomous is going to be super powerful.
  • 02:59 And I think even when we saw the Open AI and Altman, I mean, there's definitely a lot of unintended consequence here.
  • 03:04 I do believe in Dojo, Optimus.
  • 03:06 I could argue the value going forward from AAI is much more than the EV and the actual value today of Tesla.
  • 03:14 But for Musk right now to kind of exert that,
  • 03:17 it's it's odd Judah, it's Harper.
  • 03:19 It's the last thing as a as a bull you want to hear and it does sort of put gasoline on the fire a little and that's not what you wanted to hear last night that and it and it goes back to
  • 03:29 you need an adult in the room last night and instead it felt more preschool type conference call.
  • 03:35 Isn't this the cost though of doing business and investing in a company with someone like Elon Musk at the helm.
  • 03:40 Yes and no.
  • 03:41 I mean for investors like that we've seen it for decade.
  • 03:43 Right.
  • 03:43 And and you understand you take the good with the bad.
  • 03:46 But now at this point this was a huge period to sort of walk investors through, give some Gulpa, Zach, you know a CFO with him gone definitely feels a different type of conference call that we're seeing and his long term believers in the story.
  • 04:00 We remain that in terms on the other side, but in the near term the Bears won and it's hard to defend
  • 04:08 in and that's why you're going to see pressure on the stock today with 2024 being a through year in terms of margins.
  • 04:15 As a long term believer of Tesla, Elon Musk also said last night that China will pretty much
  • 04:20 demolish most other car companies in the world.
  • 04:23 How are you looking at the space overall?
  • 04:24 He's basically
  • 04:25 setting Tesla up to be taken over.
  • 04:29 Well, I think it's really Tesla and the Chinese EV players because the price war that's happening, it's a Game of Thrones price war.
  • 04:35 It's happened in Beijing.
  • 04:36 You're seeing it.
  • 04:37 I think that was the right strategic move in 2023-2024.
  • 04:42 You can't continue to go down that path.
  • 04:44 At one point you got to hold serve
  • 04:46 and as much as we talk about FSD and everything else,
  • 04:49 it you know for now it's about
  • 04:52 do you
  • 04:53 continue to cut prices.
  • 04:54 We thought 9095% were done.
  • 04:56 We were dead wrong going into that conference call.
  • 05:00 Wrong call.
  • 05:00 Now it's defending, you know, as as a bull in terms of the long term story.