Coverage: Tesla shares rise in advance of earnings release
Tesla Inc. moved its third-quarter earnings release up two weeks to Wednesday, causing the electronic carmaker’s stock to rise by more than 12 percent.
Nora Naughton of the Detroit News had the story:
Analysts and industry observers are predicting Tesla — beset by manufacturing problems, distribution snafus and a confrontation with securities regulators — to report a profit or near-profit for the third quarter after a production blitz in June likely led to more deliveries.
“We fully expect that Tesla has found a way to show a profit for the third quarter and would be very surprised if they don’t, given the hoops they jumped through to do so,” David Kudla, CEO and chief investment strategist of Mainstay Capital Management in Grand Blanc, wrote in a report ahead of Tesla’s earnings report.
Any good news for Tesla would be welcome as the company still struggles with mass production and deliveries lag — and after CEO Elon Musk’s infamous “funding secured” tweet led to a Securities and Exchange Commission investigation that forced him to step down as chairman of the company he co-founded.
Matthew DeBord of Business Insider reported that the company’s execution might be more important:
The second possibility is that Tesla wants to get the modest-lost/breakeven/near-profitable story out there and set the stage for an actual profit in Q4. In any case, revenue for the quarter is likely to surge, potentially up by more than $2 billion over Q2’s total of $4 billion.
One interesting factor to consider, given the markets’ prior wait-and-see stance, is that profitability for Tesla might be less important for investors than execution in the business, which would lead to the sort of growth that has given Tesla a market capitalization of more than $40 billion even as it builds and sells relatively few vehicles.
Regardless, if Tesla does need to raise money in 2019, keeping a floor on its stock price of about $250 would be beneficial — that’s roughly where the company has raised in the past.
Claudia Assis of MarketWatch.com reported that the stock also rose after a short seller became positive on the company:
Citron’s note comes after the Silicon Valley car maker announced late Monday that it will report third-quarter results on Wednesday, much sooner than anticipated.
The short seller had long held that by the time of the Model 3’s arrival, “multiple” 200-mile range electric vehicles would have been on the market, it said Tuesday.
“Rumors of the Tesla killers have been as constant and unfounded as Bob Lutz’s call for Tesla’s bankruptcy,” Citron said, taking a jab at the former General Motors Co. executive and frequent Tesla critic.
In March, it predicted the stock would fall to $100 by year’s end. Citron’s Andrew Left is also among the several investors and short sellers who have filed class-action lawsuits against Tesla for alleged securities law violations stemming from Chief Executive Elon Musk’s going-private tweets in August.