Tesla is like a reverse religion. Every time it fails the true believers believe even more. From Simon Black at sovereignman.com:
Sometimes I feel like I’m living in an alternate universe… it’s like the financial version of the ‘upside down’ from Stranger Things.
Case in point: last night the infamously loss-making electric car maker Tesla announced its quarterly earnings.
As usual, the numbers were gruesome. Tesla’s net loss was TWICE AS BAD as the previous quarter, a record NEGATIVE $717 million. That’s a LOT WORSE than analysts were expecting.
After adjusting for various capital investments, Tesla’s total cash burn for the quarter was MINUS $740 million… which is a bit better than what analysts were expecting. Congratulations.
Oh yeah, and Tesla
cult leader CEO Elon Musk mustered an apology to all the analysts he insulted on the previous quarter’s earnings call (where he derided them for asking “boring” and “bonehead” questions).
And now the stock has soared 12%.
Is this really what capitalism has come to?
Companies are richly rewarded for posting record losses that are worse than anyone expected because the grown men who pilot them can refrain from publicly hurling childish insults at financial analysts while managing to ‘only’ burn $740 million of shareholder capital?
Give me a break.
In total, Tesla has burned through $5 billion of its investors’ cash.
And nearly half of the money it has left in the bank is in the form of customer deposits, which are often refundable. So that money’s not even safe.
Most likely Tesla will have to raise billions of dollars over the next few years just to stay afloat.
And yet, despite these losses, and despite the fact that their CEO is sidetracked making flamethrowers, limited-edition Tesla surfboards and promising to solve Flint, Michigan’s water crisis. . .
. . . and despite the fact that he seems more concerned with Twitter spats than running the business (the Wall Street Journal ranked Musk as the second-most active tech CEO on Twitter behind Salesforce.com’s Marc Benioff, with 1,256 tweets this year through mid-July) . . .
. . . shareholders still granted their CEO the largest executive compensation package in the history of the world earlier this year (worth a potential $50 billion). . .
To continue reading: Tesla stock soars on news they ‘only’ lost $717 million