Tesla's profits plummeted in the first quarter, prompting Elon Musk to go on a rant about the lockdown extension in the Bay Area.
Elon Musk is once again grabbing headlines for all the wrong reasons. Tesla’s (NASDAQ:TSLA) chief executive went berserk on Twitter Wednesday and revealed his true feelings about shelter-in-place orders. Musk was not shy to say that the lockdown should end while claiming that the occupancy rate of hospital beds in California is 50% at best.
His Twitter rampage was a preview of what would come next. Musk went off Wednesday afternoon during the company’s earnings call.
The Tesla CEO did not mince words during the company’s earnings call on Wednesday. Musk labeled the shelter-in-place orders that are designed to curb the spread of coronavirus as “fascist” in an expletive-laced rant:
We are a bit worried about not being able to resume production in the Bay Area. The extension of shelter-in-place, or as I would call it, forcibly imprisoning people in the their homes, [is] against all constitutional right, and in my opinion infringing on people’s freedoms in ways that are horrible and wrong, and not why people came to America or pulled this country – what the f**k.
It is reported that the audio for the call was cut as Musk veered way off-script.
Earlier this week, authorities confirmed the extension of the Bay Area lockdown until the end of May. The idea that the Fremont factory would remain idle for another month appears not to sit well with Musk. Neither does the sharp drop in net income.
The economic fallout of the novel coronavirus killed the electric automaker’s momentum. Tesla posted a net income of $143 million in the third quarter of 2019 and $105 million in the quarter ending December 2019. Tesla was finally turning a corner, considering that it lost over $700 million in the second quarter of 2019.
But the lockdown orders choked both supply and demand. Production stopped as Tesla’s facilities shut down and people stopped buying new cars. The economic conditions led to an 85% drop in Tesla’s net income.
While profits plunged, the company still beat analysts’ estimates. Refinitiv expected Tesla to post a narrow loss due to closures of its Fremont and Shanghai factories. But instead of focusing on the fact that Tesla beat expectations, Musk went on a tirade during the earnings call. Investors may not care for now, but for better or worse, people are starting to see Musk’s true colors.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. The writer does not own shares of Tesla.
Last modified: September 23, 2020 1:54 PM