Bud Fox News has learned that on Monday, August 17, Morgan Stanley accidentally published a laughably optimistic equity research report on Tesla Motors (price target $465 vs $218.87 today) that was written by analyst Adam Jonas. The 39-page tree-killer was actually a homework assignment for the Science Fiction & Fantasy Writing class that Jonas is taking at the Gotham Writers’ Workshop. According to the course description:
Whether extrapolating science into futuristic technology or conjuring new forms of magic, these genres imagine what might have been or what might be, opening the door to any possibility.
Jonas’s report does indeed open the door to any possibility, to wit: the fantastic price target is based on how much a currently non-existent division (direct-to-consumer ride sharing), which the company in no way has suggested it’s creating, might be worth in the sci-fi worthy world of 2029, by which time one hopes that analytical robots will have replaced investment-banking-compromised human equity analysts for the benefit of investors everywhere. On the company’s 2Q earnings call, Tesla CEO Elon Musk wouldn’t even entertain a question about what has become Jonas’s entire investment thesis:
Jonas: Hey, Elon, Deepak. First question. Steve Jurvetson was recently quoted saying that Uber CEO Travis Kalanick told him that if, by 2020, Tesla’s cars are autonomous, that he’d want to buy all of them. Is this a real — I mean, forget like the 2020 for a moment — but is this a real business opportunity for Tesla, supplying cars to ridesharing firms, or does Tesla just cut out the middleman and sell on-demand electric mobility services directly from the company on its own platform?
Musk: That’s an insightful question.
Jonas: You don’t have to answer it.
Musk: I think — I don’t think I should answer it.
Jonas: Okay. Let’s move on. Second question is, there’s been — sometimes you can tell more from the non-answer than from the answer.
OK, non-answer answers are revealing if the question is “Are you asleep?” But I’m not exactly sure how helpful Musk’s non-rejoinder is. At a stock price of $465, Tesla, negative with respect to both net income and free cash flow, would have a market cap greater than that of GM or Ford. Jonas seems to be suggesting that we “forget like” worrying about such trifles as positive earnings.
Bud Fox News‘s Silence Bellows spoke with Ingeborg von Zitzewitz, Director of the Philip K. Dick Time Travel Institute, who had this to say about Jonas’s attempt at creative writing:
It’s a scary dystopian vision with driverless cars dominating a bleak futuristic landscape. Jonas imagines a United States where Tesla, not realizing that it is jeopardizing the human race, cranks out over 550,000 of these machines, who quickly surpass mankind because these autonomous vehicles are “able to learn through over-the-air firmware updates at any time.” In this nightmare scenario, reality becomes “the shared mobility public transportation hyper-structure.” It’s terrible equity research, but it’s brilliant speculative fiction.
It should be noted that Morgan Stanley has an investment banking relationship with Tesla, so when Jonas’s real Tesla report is published, one thing is certain: It will have a buy rating on it.