Tesla Shares Climb After Earnings Report

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I have waited all day for this – waiting for Tesla Motors (NASDAQ:TSLE) to release its third quarter results and reading about the gloom and doom the prognosticators have been predicting.

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Well, it is certainly a mixed bag. I have to give you that. The simplest headline out there at the moment is “Tesla Reports 3Q Loss.” Heck, I could have written that headline before I went to bed last night.

Tesla presented a very stylish report, taking several pages to get to the bottom line that, “Our Q3 non-GAAP net loss was $75 million, or a loss of $0.58 per basic share based on 129┬ámillion basic shares, while our Q3 GAAP net loss was $230 million or a loss of $1.78 per basic share.” That’s a chunk of change.

At first glance, it appears that Tesla shares dropped in response to the report, closing down 2.54% on the day at 208.35. Tesla closed on 02 November at 213.79. Its share price has been in decline since 20 July, when they were trading at 282.26.

BUT…

Lest we forget, on 02 January this year Tesla was at 222.41, so from the longer perspective it’s not quite so bad.

AND…

As I am writing I am watching the after hours trading of Tesla, where I just witnessed the share price reaching 228.53, an increase of 9.69%. Since the earnings report was not released until the final bell on the NASDAQ exchange, one would have to assume that there was at least some good news to report.

Much of that good news has to do with the company’s outlook, which, at the moment, appears to be better than general expectations. Whilst investors are reacting positively, Pacific Crest Securities analyst, Brad Erickson, explained that “We think there is a significant execution risk involved.”

REALLY?

A significant execution risk? Are you kidding me?

  • Tesla makes electric cars
  • Tesla makes only electric cars
  • Tesla cars are expensive
  • Tesla has to build a sustainable, national network of charging systems – in every country where it sells vehicles
  • Tesla the company is about as off the beaten track as its namesake was.

Significant risk? Of course.

The Tesla Stigma

Elon Muck picked a great name for his company. Nikola Tesla was regarded as an oddity by many, especially those who believed Thomas Edison’s propaganda about his own theories and methodologies. Turns out that Edison was better at PR and politics than Tesla. On the other hand, it turns out that Tesla was right about how to efficiently distribute electricity to the masses.

It seems altogether appropriate that Tesla Motors would suffer the same ignominy as Mr. Tesla did himself. That’s often the case when a rare few individuals see far beyond the bonds that limit the rest of us ordinary people. What we don’t understand, we fear. What is not proven, we consider risky. That’s just the way things are.

Some people believe. Some don’t. I still believe.

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