Tesla’s Electric Whine

Tesla reported weak deliveries

Image source: Darren Brode - Shutterstock

What's going on?

Tesla’s stock skidded 8% on Thursday after the company delivered far fewer cars than expected last quarter.

What does this mean?

Tesla delivered 31% fewer cars in the first quarter of this year than in the previous one – a decline the company blamed on logistics issues in shipping its newest car to Europe and Asia for the first time. But some investors fear demand Stateside has slumped despite price cuts – something fellow Californian techie Apple knows all too well. Tech stocks can be unpredictable, especially when not underpinned by profits, leaving investors to look elsewhere for indications of value. Several investors are already betting loss-making Lyft’s stock will fall further after it “went public” just last week…

Why should I care?

For you personally: Like Tesla? You’re not alone.

Tesla’s one of the most popular stocks among individual investors (and not just millennials), averaging 10% of their stock portfolio, according to TipRanks (tweet this). Professional hedge fund investors were buying up Tesla’s stock last quarter too – but there are alternating currents among investment analysts: TipRanks says half recommend buying Tesla’s shares and half suggest selling. Still, almost a quarter of Tesla’s shares have been “shorted” by investors expecting their price to fall.

The bigger picture: Some investors – and regulators – prepare to charge.

Tesla’s falling stock may reflect dread at a return to serially disappointing form. Profitable in each of its last two quarters, fewer deliveries will bring a quarterly loss this time. And Tesla’s CEO, Elon Musk, is huddled with his lawyers: his February tweetstorm wrongly suggested even higher car production in 2019 than the company’s official prediction – which, given Thursday’s update, could put him in the naughty corner at best, if ruled in violation of his previous legal settlement. Tesla’s shareholders may be forgiving so long as there’s enough cash in the tank – and Tesla confirmed on Wednesday that its funding was actually secured for now.

Originally posted as part of the Finimize daily email.

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