Tesla Stock On A Roller Coaster Ride Amid Leaked Email, Musk’s Tweet

Tesla stock rose 1.6% on Monday in a volatile session after a leaked internal email showed CEO Elon Musk asking employees to “rally hard” for record deliveries in the third quarter. However, shares were down almost 3% in pre markets today after Musk tweeted that high-volume battery cell production wouldn’t start until 2022.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 2020 hedge fund letters, conferences and more

Tesla’s leaked email

It is not uncommon for Tesla’s internal emails to “leak” especially towards the end of the quarter. Tesla stock typically rises after such leaked emails. Last year, as the third quarter was about to end, a leaked email showed Elon Musk pushing for 100,000 deliveries in the quarter. While the company missed the target, its shares rose after the leaked email.

Something similar happened yesterday after a leaked email showed Tesla pushing for record deliveries in the quarter. “We have a shot at a record quarter for vehicle deliveries, but will have to rally hard to achieve it. This is the most [sic] number of vehicles per day that we’ve ever had to deliver,” said Musk in the leaked email.

Tesla’s deliveries

Tesla delivered a record 112,000 electric cars in the fourth quarter of 2019. Deliveries fell to 88,400 in the first quarter of 2020. The first quarter is generally slow for the company. Furthermore, its China operations were impacted in the quarter due to the COVID-19 pandemic.

In the second quarter, the shutdown of Freemont plant hit Tesla’s deliveries. However, it still managed to deliver 90,650 cars in the quarter, beating analysts’ estimates.

How many cars do analysts expect the Elon-Musk led company to deliver?

According to the estimates compiled by FactSet and StockApps, analysts expect Tesla to deliver 144,000 cars in the third quarter as its Freemont, as well as Shanghai plant, were operating during the quarter.

Tesla stock was very volatile on Monday. It opened marginally higher even as the Nasdaq had a gap down opening. It fell to an intraday low of $407.07, falling almost 8% from its previous day’s closing. However, shares erased the gains to close near their intraday high.

Musk’s email on the battery day

Tesla is holding is widely awaited battery day today with expectations running very high on new announcements especially on the million-mile battery. Musk dashed some of the hopes as he tweeted “Important note about Tesla Battery Day unveil tomorrow. This affects long-term production, especially Semi, Cybertruck & Roadster, but what we announce will not reach serious high-volume production until 2022.”

Tesla shares fell almost 6% in post markets on Monday and were trading down almost 3% in pre markets today as Musk’s tweet dampened sentiments. This is not the first time that Tesla’s shares are falling after a musk tweet.

Tesla’s stock price reacts to Musk’s tweets

In May, Tesla shares had tanked after Musk tweeted that he finds shares expensive. Tesla shares have continued to rally. Earlier this month, Tesla announced its second capital raise for the year and raised $5bn to shore up its balance sheet.

Tesla shares are up over 437% for the year as markets are bullish on the electric vehicle and autonomous driving story. However, most analysts are cautious on the stock given its soaring valuations.

The post Tesla Stock On A Roller Coaster Ride Amid Leaked Email, Musk’s Tweet appeared first on ValueWalk.