Jim Cramer on Elon Musk's 2014 Q4 Conference Call

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lorenfb

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- Yahoo Finance On CNBC Broadcast On the 2014 Q4 Elon Musk Conference Call -

"That's it, Jim Cramer has had enough!

"Is Elon Musk seriously proud of the disaster conference call that he held for Tesla this week?
Elon, consider this as your one and only warning from Cramer before you land on the Mad Money
Wall of Shame."

Looking back, Cramer has always referred to Tesla as a "cult stock." Those are stocks that remain
difficult to value, because they do not trade on earnings or traditional measurements used to
value stocks. Instead, they trade on how snazzy the last press release was. That meant that to
believe in Tesla, investors couldn't hold it accountable for its bottom line. Investors would have
to believe that the car would do better than the competition, and the CEO would lead the charge
for the company and allow it to flourish. Cramer's dreams were crushed in practically every aspect
after listening to Musk's conference call Wednesday evening. The company missed the mark
on sales, earnings and cash flow and guidance. It is swimming in debt, with a negative $455
million cash flow. "It is burning money like crazy. It is spending money like crazy. No way the
balance sheet can support the investment needed," said the "Mad Money" host.

But the real kicker was the responses provided by Musk to valid questions about earnings.
When asked why sales were weak, and how manufacturing problems held back the company,
Musk responded that it was "physically impossible due to a combination of customers being
on vacation, severe winter weather and shipping problems." Customers on vacation?! Musk
then referred to his employees as being "brain-dead" when clarifying that the perceived issue
in China is that his sales team gave the incorrect perception that it was difficult to charge cars
in China, though it was not. He then responded to a question of profitability for the future by
stating "I'd like to emphasize that doesn't mean 'B.S.' profitable, it means really profitable."

Cramer was shocked that a CEO would curse on a conference call and compared the lowbrow
action to Enron's CEO desperately cursing at an analyst shortly before it fell apart. Musk then
went on to compare Tesla to Apple, and confirmed that it will be spending staggering amounts
of money on capital expenditures. Where the heck is this money going to come from? While he
loves the Tesla car, he does not like the company. And though Cramer does consider Musk a genius,
he is now officially issuing him a formal warning. "Make no mistake about it, this was a fiasco
miss of immense proportions coupled the arrogance of Steve Jobs without the wonderment to
back it up.""
 
TomT said:
No one with any real smarts - street or otherwise - really cares what Kramer thinks! He is nothing but a showman and a buffoon!

Why the ad hominem attack? Why not address the issues Jim Cramer presents in the article?
 
lorenfb said:
TomT said:
No one with any real smarts - street or otherwise - really cares what Kramer thinks! He is nothing but a showman and a buffoon!
Why the ad hominem attack? Why not address the issues Jim Cramer presents in the article?
I think showman and buffoon pretty much nail it; he might also be called Wall Street's cheerleader and/or a corporate shill. He probably knows there are a lot of Tesla and Musk haters out there (why?) and wants to pander to them. He also quite likely missed Tesla early, as perhaps did many of its detractors (especially on Seeking Alpha, e.g.), and partly for that reason, wants them to fail -- or at least fall -- and spins everything negatively.

He's missed on many of his "analyses", and some make money by investing opposite(ly) to his 'advice'. So if you have no respect for someone, there's little reason to seriously address things they say.
 
lorenfb said:
...
Why the ad hominem attack? Why not address the issues Jim Cramer presents in the article?

Your asking why HE made an ad hominem attack? Why not ask why Cramer is making them?
 
lorenfb said:
... He [Musk] then responded to a question of profitability for the future by
stating "I'd like to emphasize that doesn't mean 'B.S.' profitable, it means really profitable."

Cramer was shocked that a CEO would curse on a conference call and compared the lowbrow
action to Enron's CEO desperately cursing at an analyst shortly before it fell apart. Musk then
went on to compare Tesla to Apple, and confirmed that it will be spending staggering amounts
of money on capital expenditures. Where the heck is this money going to come from? While he
loves the Tesla car, he does not like the company. And though Cramer does consider Musk a genius,
he is now officially issuing him a formal warning. "Make no mistake about it, this was a fiasco
miss of immense proportions coupled the arrogance of Steve Jobs without the wonderment to
back it up.""

Cramer misleads and mis directs.
Comparing Musk's use as an adjective for describing tiny, or insignificant profits (which he stated is NOT what he means when he talks about profitability) to a CEO calling an analyst some curse words is simply not the same thing.

As for where the money is coming from, it is coming from the staggering amount of money coming in from sales. They make a gross profit of about 27% on their cars, or an average just above $27,000.
If they sell 55,000 cars this year, that will be almost 1.5 Billion.
Design on the X is done.
If they build 300 Superchargers this year that is about 50 Million, leaving 1.45 Billion left. They also raised 2-2.5 Billion last year.

I don't see cash flow as a problem.
 
I think Musk is focusing on doing the right thing for the industry, his customers and the company. Investors be damned. As it should be IMHO. You should invest in a company because you believe in what they're doing, not because they'll pander to your desire to make money.
 
I actually find the energy and passion at the leadership level refreshing. Hopefully it doesn't end in tears, when it comes to corporate finance it really is important to have some adults in the room too.
 
I have to agree with the others with regards to Cramer. He's an entertainer, not someone an investor should listen to.
 
lorenfb said:
Why the ad hominem attack? Why not address the issues Jim Cramer presents in the article?
Kramer has zero credibility. Can you first post what Kramer said about Bear Sterns and others before their 2008 melt-down ?
 
GeekEV said:
I think Musk is focusing on doing the right thing for the industry, his customers and the company. Investors be damned. As it should be IMHO.
I would hope that anyone with this attitude would make it very clear and would have the integrity to not solicit funds from investors.
 
mbender said:
... He also quite likely missed Tesla early, as perhaps did many of its detractors (especially on Seeking Alpha, e.g.), and partly for that reason, wants them to fail -- or at least fall -- and spins everything negatively.

He's missed on many of his "analyses", and some make money by investing opposite(ly) to his 'advice'. So if you have no respect for someone, there's little reason to seriously address things they say.

Yes, there's the famous quote from Kramer bashing TSLA in the "Revenge of the Electric Car" documentary. Bear in mind this was when TSLA opened at about $17.

Taken from this Kramer segment:

https://www.youtube.com/watch?v=6nYPhi0LwO0" onclick="window.open(this.href);return false;

And Elon Musk's reply:

https://www.youtube.com/watch?v=OJ40QRTC0RA" onclick="window.open(this.href);return false;
 
As for the good news,
lorenfb said:
"...Elon, consider this as your one and only warning from Cramer before you land on the Mad Money Wall of Shame."
So, if he keeps his word, we won't have to listen to him anymore after this. And a "Wall of Shame" segment would be a collectible, in the future, after Tesla makes good on its promise.
 
TomT said:
Because the man is a fool and nothing that he presents is worthy of the time wasted to comment or rebuke...

lorenfb said:
Why the ad hominem attack? Why not address the issues Jim Cramer presents in the article?

And this public comment by Musk is representative of an exemplary CEO's view of his organization,
right?

"Musk then referred to his employees as being "brain-dead" when clarifying that the perceived issue
in China is that his sales team gave the incorrect perception that it was difficult to charge cars
in China, though it was not."
 
lorenfb said:
And this public comment by Musk is representative of an exemplary CEO's view of his organization,
right?

"Musk then referred to his employees as being "brain-dead" when clarifying that the perceived issue
in China is that his sales team gave the incorrect perception that it was difficult to charge cars
in China, though it was not."

Except that wasn't Musk's statement, at best it is slightly changing his words AND taking them out of context.

Tell me, would you describe making the statement, "The Leaf has a range of 120 miles" as making a kind of brain dead statement?
 
lorenfb said:
And this public comment by Musk is representative of an exemplary CEO's view of his organization, right?

Yahoo Finance said:
"Musk then referred to his employees as being "brain-dead" when clarifying that the perceived issue in China is that his sales team gave the incorrect perception that it was difficult to charge cars in China, though it was not."
So you want to condemn Musk for using the word "brain-dead"? Everything before and after that word in the quote you post is context provided by Yahoo Finance (and/or CNBC or whomever), NOT Musk.

Here's what Musk actually said -- i.e., in his own context. From the transcript (slightly edited for readability):

  • That’s an important point. And the biggest issue which we’re still fighting to address is this perception that [it is] difficult to charge your car in China. This is false: it is not difficult to charge your car in China. Unfortunately, this sounds kind of brain dead but our sales team was telling people that it was difficult to charge in China. Even though this is not true, like... that is pretty silly. And so I put the guy who was in charge of the supercharger rollout in China, is doing an awesome job, an engineer basically, he’s not a sales person, in charge of China to make sure that charging is super easy and excellent.

Just a little difference, do ya think?! Even if you twist this into him 'calling his employees brain-dead', it was just a handful, in China, who quite likely are no longer Tesla employees. Employees with the emphasis on 'oy', one might say.
 
mbender said:
lorenfb said:
And this public comment by Musk is representative of an exemplary CEO's view of his organization, right?

Yahoo Finance said:
"Musk then referred to his employees as being "brain-dead" when clarifying that the perceived issue in China is that his sales team gave the incorrect perception that it was difficult to charge cars in China, though it was not."
So you want to condemn Musk for using the word "brain-dead"? Everything before and after that word in the quote you post is context provided by Yahoo Finance (and/or CNBC or whomever), NOT Musk.

Here's what Musk actually said -- i.e., in his own context. From the transcript:

  • That’s an important point. And the biggest issue which we’re still fighting to address is this perception that [it is] difficult to charge your car in China. This is false: it is not difficult to charge your car in China. Unfortunately, this sounds kind of brain dead but our sales team was telling people that it was difficult to charge in China. Even though this is not true, like... that is pretty silly. And so I put the guy who was in charge of the supercharger rollout in China, is doing an awesome job, an engineer basically, he’s not a sales person, in charge of China to make sure that charging is super easy and excellent.

    (slightly edited for readability from the linked transcript above)

Just a little difference, do ya think?! Even if you twist this into him 'calling his employees brain-dead', it was just a handful, in China, who quite likely are no longer Tesla employees. Employees, with the emphasis on 'oy', one might say.

"Unfortunately, this sounds kind of brain dead but our sales team was telling people that it was difficult to charge in China."

Bad choice of words in any case, that most competent CEOs would not use!

Bottom line: One would expect a more professional conference call from a highly watched and
quoted company.
 
AndyH said:
lorenfb said:
Bad choice of words in any case, that most competent CEOs would not use!
Where do you teach CEO conversation classes? I want to sign up for one. Thanks in advance.

Doesn't Musk have a business degree from Wharton? Was he asleep in some classes, e.g. Strategic Marketing?
 
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