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Tesla's Terrible Timing

Jul. 10, 2017 12:17 PM ETTesla, Inc. (TSLA)GS134 Comments


  • Tesla delivery numbers fail to impress the street last week.
  • Company tries to put a "band aid" on the situation by disclosing number of vehicles in transit on Friday.
  • Market wasn't really impressed with this disclosure either.
  • We believe a loss of confidence from investors and analysts, which is the company's key asset right now, couldn't come at a worse time.
  • Elon Musk Tweets out new Model 3 pictures over the weekend, but can the narrative still move the needle without the financials?

By Parke Shall with Thom Lachenmann

Tesla (NASDAQ:TSLA) got hit pretty hard over the last week on worse than expected delivery numbers and a general loss of confidence from the sell side. Today we wanted to write an article on explain why the timing for both of these things couldn't have come at a worse time for the company and its investors, in our opinion.

It's been a long while since we have written about Tesla, mostly because there wasn't too much to update on when it came to the thesis. Put simply, we have been skeptics as the stock has just moved higher and higher. The way that we had left it with Tesla was that the company was surviving (and its stock thriving) off of its future prospects and its narrative. All the while, in terms of earnings power, the company had little to fall back on. That hasn't stopped the company from making an extremely impressive run over the last couple of years, appreciating significantly and performing extremely well as an investment for its shareholders.

ChartTSLA data by YCharts

Not only did the company underwhelm the street last week when it posted quarterly delivery numbers of just 22,000 units, but it did so at the worst possible time. Then, instead of letting the market correct its share price, it rushed out mid-day on Friday to announce the number of vehicles that were in transit for the quarter (3500), something the company had always done as part and parcel with its delivery releases in the past. The first release and the changing attitude from the sell-side came at a bad time for the company. The second move simply made the company look a little bit desperate, in our opinion. In both cases, we believe the timing couldn't be worse for the company.

This article was written by

Contributors: Scott Tzu, Parke Shall, Thom Lachenmann (contributors write under pen names for anonymity purposes) Please read Seeking Alpha's Policy on Anonymous Contributors to familiarize yourself with the site's terms and conditions relating to anonymous authors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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