Tesla released a flurry of news alongside its $35,000 Model 3 reveal yesterday which had been largely leaked in advance, that has sent shares sliding on Friday, the day the company has to make a nearly $1 billion convertible bond payment in cash (as the Tesla stock price failed to rise above the conversion price)

Analyst reaction to the news was tepid at best, with Barclays saying the event "undercut a few of [the] pillar[s]" to its bull case and Morgan Stanley saying it thought the announcement gave "bears more material to work with than bulls". JP Morgan predicted "another round of potentially thousands of lay-offs". Goldman Sachs called the event "anticlimactic for investors" and, of course, there was Gordon Johnson's comprehensively bearish take on Tesla's "demand problem" which we published last night.

But the strangest thing about Thursday night's news dump wasn’t the company's release of a fully stripped down, bare-bones $35,000 Model 3, nor was it the fact that Tesla is going to be closing almost all of its retail outlets just months after announcing plans to open more of them, as the New York Times' Neal Boudette noted.

This is not an adjustment to strategy. This is a total reversal. They had a retail plan 2 months ago and concluded they had to tear the whole thing up and come up with a radical new plan. What does that say about the company? @elonmusk @tesla https://t.co/3k04m0pW5i — Neal Boudette (@nealboudette) March 1, 2019

The strangest thing about yesterday wasn’t even that Tesla's counsel in its ongoing case with the SEC was replaced.

No, the strangest thing about yesterday was the fact that Tesla – a company under scrutiny by the SEC right now for its practices regarding disclosure – appeared to hold a conference call for select members of the media and investment community that the rest of the public did not have access to. Further, the company reportedly discouraged people from recording the call, where they proceeded to take questions on the news release, offering answers that certainly seem to be material in nature.

I have been given access to the private on the record call $TSLA had with journalists yesterday. Can’t release the audio at this time but will share some fun snippets. — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

One Twitter sleuth, Paul Huettner, CFA, reportedly had access to the call and did his best on Twitter to summarize some of the key points that Tesla made that retail investors and uninvited newsmedia may not have had access to. Those points included:

1. Tesla specifically asking the newsmedia to not record or publish transcripts from the call.

“Please do not publish the recording or transcripts of this call. Finally, any statements made today related to our future business or results are forward looking statements and actual results could differ materially due to factors mentioned in our most recent 10-K.” $TSLA IR — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

2. Elon Musk pitching lower car insurance as a Model 3 benefit.

Elon describing the $TSLA M3



“Safest car in the world. Lowest probability of injury of any car in the world.”⁰⁰“We’re also confident that uh…ummm…that…uhh…car insurance will be lower. That’s something we’re working really hard towards.”



That’s a new one!! 😂 — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

3. Elon Musk reportedly telling Phil Lebeau that it's "foolish to focus on the reservation list" for the Model 3.

“No that’s…Reservation list is like a…It’s foolish to focus on the reservation list. That’s like saying “How many preorders did you get for a video game. That doesn’t mean anything. The video game is out! Okay. The car is out! — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

4. ...followed by Musk admitting he "doesn't know" what demand is.

What matters is uh…is….uh what is the demand. I don’t know what the demand is. But if you ask me what my considerate judgement is for the demand I said it’s a half a million cars a year.” $TSLA — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

5. Before ducking one reporter's question on layoffs that would occur as a result of the upcoming store closings.

Hope King of @cheddar: “How many people might lose their jobs as the result of the closure of stores”



Elon: “That’s not today’s topic. Next question.” — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

6. Musk reportedly also said an even cheaper future Model 3 model is coming in "at least 2-3 years".

In response to a question from Olivia Rudgard from @dailytelegraph regarding potential cheaper future models, Elon says,



“Will there be a future model that cost less? Uh. Yes. But they won’t be soon. It would be at least 2-3 years. Probably closer to 3 years.”$TSLA — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

7. Musk offering what sounds like extremely material guidance on the company's financial performance for the upcoming Q1 and Q2 reports.

Previously reported but Elon on making $$



“Given that there was a lot happening in Q1 and were taking a lot of one-time charges and a lot of challenges getting cars to China & Europe. We do not expect to be profitable in Q1. But we do think that profitability in Q2 is likely.” — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

8. And finally, when asked about profit margin on the Model 3, Musk reportedly responded that he "wasn't going to answer questions like that".

Ok my real favorite. $TSLA



Chuck Tannert at @Forbes Q: “What is Tesla’s profit margin on each and every $35k Model 3 sold?”



Elon “Yeah. Were not going to answer questions like that. Next question.” — Paul Huettner, CFA (@Paul_M_Huettner) March 1, 2019

Naturally, Twitter users, including newsmedia and investors, were aghast at the way Tesla communicated these answers:

Almost all the questions asked by reporters at today’s conference made me feel more depressed than ever about what’s happening to my profession. Tesla won’t release a transcript or a recording, so if you weren’t there you’ll have to take my word for it. — Russ Mitchell (@russ1mitchell) March 1, 2019

A request for a recording of a conference call from a $50bn equity value co where material information was disseminated and the general public was not invited. And that’s the way it was. $TSLA https://t.co/7vUE1xPsiA — Charley Grant (@CGrantWSJ) March 1, 2019

By the way is $TSLA hosting a secret conference call where they’re doling out material guidance and ducking questions on margin? And if so, sans an 8-K, how does that not pornographically violate securities laws? @SEC_Enforcement — Quoth the Raven (@QTRResearch) February 28, 2019

We can't imagine the SEC would be amused, not only by the content of this call, but the matter in which its selective participants found out about it. We look forward to a transcript eventually making its way to the public domain, where it can be dissected by critics of the company on Twitter first, and hopefully wind up as the freshest document on top of a pile of evidence that regulators will use to throw the book at the company second. We're not holding out hope, however.