Tesla Motors Inc CEO Elon Musk, had a herculean task ahead of him on Tuesday when the EV maker was due to release its third quarter results. It was obvious that the firm was already behind schedule on its target to deliver between 50,000 and 55,000 cars this year. Wall Street expected the firm to post a loss, and they were ready to forgive weakness in its financials – yet, it was obvious that Wall Street won’t take anything less than impressive delivery number and targets from Tesla Motors.
Tesla Motors reported top and bottom line reports that were below estimates and it appears as if the sky would cave in on the firm. The first reported non-GAAP revenue of $1.24B and an EPS loss of ($0.58) per share. The market had expected Tesla Motors to show revenue of $1.26B and a loss of $0.48 per share. The worst part was that its deliveries in the third quarter. The firm reported that it delivered just 71 more cars in Q3 than it did in Q2.
Tesla Motors up despite weak Q3 report
As strange as it might sound, the sky did not fall for the firm and the shares of the firm have actually rebounded to erase the 2.54% decline in Tuesday’s session. The shares of Tesla are up a decent 8.01% to $225.03 in pre-market trading to suggest that investors were not really bothered by the weak Q3 results. One of the factors that helped Tesla maintain the goodwill of Wall Street the strong delivery forecast that it posted.
It has been hinted earlier that Tesla Motors might avoid the bear hug if it can show a concerted effort to ramp up production and delivery of its cars in the last quarter. The firm says it plans to make between 15,000 and 17,000 cars in the fourth quarter.
The firm also said that it would deliver between 17,000 and 19,000 cars in the quarter. The icing on top of the cake came when Tesla hinted that building of its Gigafactory project was “ahead of schedule” and that development of the mass Market Model 3 is “on track”.
If Tesla Motors can really get more than 17,000 cars out the door in the third quarter it will be a major feat, and it will instill a huge amount of confidence in shareholders. On Tuesday afternoon, however, it seemed that the promise of reaching that number was quite enough. Stock soared, and the forecast appears to be the major reason.
Billionaire mutual funds place bullish bets on Tesla
Tesla Motors has long attracted everyday investors who fell in love with Elon Musk’s plan to change the face of transport with clean EVs. Now, billionaire mutual funds are also buying into Musk’s dream as CNBC reports the biggest mutual fund bets on Tesla Motors.
To start with, RidgeWorth Aggressive Growth Stock Fund is one of the biggest bullish Tesla backers as the firm’s stock makes up 6.2% of its holdings. Joe Dennison, an associate portfolio manager at the fund notes that the firm “has superior technology and a large lead on competitors. The company has been growing more than 50 percent annually in a market that hasn’t been disrupted in about a century,”
Rowe Price’s Global Technology Fund has 5.4% of its $2.5B holdings in Tesla. Josh Spencer, portfolio manager at the fund says he loves Tesla because “it’s a game-changing company with a huge lead over the competition.”
