Tesla share price soars as Q3 profits beat expectations despite 40% sales slump
The electric carmaker shocked investors and short-sellers after smashing Q3 profit forecasts, despite a drop of almost 40% in revenue from the US market.
The news sent is shares soaring more than 20% in the days following its earnings, though despite the electric carmaker returning to profitability, quarterly revenues surprisingly fell compared with last year – the first time that has happened since 2012. In fact, revenues came in at $6.3 billion, below the $6.45 billion analysts expected.
Tesla ramps up production in China
The electric carmaker also used its latest results to tell investors that it is ramping up production in China ahead of schedule.
‘We are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai,’ the company said.
‘We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai.’
Short-sellers lose big after Tesla’s shock earnings
Tesla short-sellers took a $1.4 billion hit last week after its shock earnings – wiping out around 70% of naysayers profits for the year, according to financial analytics provider S3 Partners.
‘Shorts were reducing their exposure in the event of a strong earnings report,’ Managing Director at S3 Ihor Dusaniwsky wrote in a note last week.
‘We are expecting more short covering and the continuation of this long-term short squeeze as TSLA's stock price continues to show strength,’ he added.
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