Among the many faces of Elon Musk—for a glimpse of how many, look no further than the Musk memes—the Tesla CEO seems to have found the persona most likely to make him rich: Apologetic Elon.
Tesla stock surged as much as 13% Wednesday evening after a quarterly earnings call in which Musk apologized on three separate occasions, including personally saying sorry to two Wall Street analysts he’d berated on the previous quarter’s conference call. At the time in May, Musk had cut off and refused to respond to the analysts, lambasting them for their “boring, bonehead questions.” Tesla stock had plunged 5.5% the day after, tumbling a total of more than 9% over the following weeks.
On Wednesday, Musk took responsibility for his behavior. “I’d like to apologize for, you know, being impolite on the prior call,” he told Toni Sacconaghi of Bernstein, allowing him to ask the first question. “Honestly, I think there’s really no excuse for bad manners, and I was kind of violating my own rule in that regard.
“There are reasons for it in that I’d gotten no sleep, and been working sort of 110-hour, 120-hour weeks,” Musk continued. (That equates to working 17 hours a day, seven days a week.) “But nonetheless there’s still no excuse. My apologies for not being polite on the prior call.”
To Joseph Spak of RBC Capital Markets—another target of the CEO’s temper last quarter—Musk added, “That was not right, and I hope you accept my apologies.”
Investors certainly accepted them. Never mind that Tesla reported record net losses for the second quarter that were even steeper than Wall Street had expected. Here was well-rested Elon. Zen Elon. Rather than disgruntled, grumpy Elon whining that analysts’ questions were “killing” him, this was contemplative Elon—answering blue-sky questions from Morgan Stanley’s Adam Jonas: Does Musk worry that autonomous cars will eventually be seen as weapons-grade technology? (Not at all: “It’s just like, the car’s trying to drive.”) Which of Amazon and BMW does he see as the bigger competitive threat? (Neither: “I would be pretty shocked if Amazon got into the car business.”)
Although Tesla stock rose slightly upon the release of the financial results themselves, it wasn’t until Musk started talking that it really took off, boosting Tesla’s market value by more than $5 billion in after-hours trading.
You could audibly hear analysts’ sighs of relief as it became clear that reasonable, grounded Elon had returned. After all, while Tesla’s stock price had recovered in early June, it fell as much as 21% over the past month and a half leading up to Wednesday’s call as Musk’s erratic tweeting and a series of offensive remarks raised concerns about his fitness as a leader. Musk’s name-calling a Thai rescue diver a “pedo” (short for pedophile) in mid-July precipitated a 4% decline in Tesla stock (though the CEO’s subsequent apology seemed to somewhat reassure investors).
But this was respectful Elon, who even, in a rare move, took questions from journalists (of The Wall Street Journal and CleanTechnica)—a frequent punching bag of his—and even thanked them for their “in-depth coverage.”
“There’s so much love and respect for colleagues and Wall Street analysts on this call it is lifting my spirits, what can I say?” Jonas noted aloud during the Q&A.
It was a measured, convincingly honest version of Elon, who cautioned that just because Tesla isn’t running out of cash (he swore the company would not need to raise more capital for the foreseeable future) doesn’t mean it’s “rolling in money,” and acknowledged that Tesla’s biggest slowdown for Model 3 production right now is in assembling the cars’ bodies. At least, it was a well-coached Elon.
Coins2Day president Alan Murray spoke for many investors when he wrote last month about why he’s not ready to buy Tesla stock or a Tesla Model 3—even as Musk vowed that he was working so hard to hit production goals, he’d been sleeping on the Tesla factory floor. “I’d like to see a little more stability before entrusting him with either my retirement savings or my morning commute,” Murray wrote. “I prefer a CEO who has the confidence to sleep soundly in her bed at night.”
If all it takes to increase Tesla’s value by a few billion dollars is Musk getting a good night’s sleep and maintaining a kindergarten level of human decency, the company may find itself much more valuable as investors with Murray’s line of thinking come on board.