In the Call of Tesla results, no one wanted to talk about … Tesla’s results
If, by chance, he looked at Tesla’s second quarter results report, made public on Wednesday night, may not be surprised by the fact that the company’s actions were crushed on the Wall Street stock market on Thursday morning. Simply put: sales have been free falling, profits have been decreasing for three consecutive quarters and the US government has been about to cut a crucial revenue flow.
But if he had heard the company’s presentation along with analysts, he would have no idea the reason for falling shares. In the presentation of results, there was no talk of, hum, results. And the general message of the Tesla responsible seemed to be: we are a robotics company and I was and, one day, will soon be spectacular.
For now, many optimistic analysts – especially those that the company has summoned during the teleconference – agree with the view of Tesla’s CEO Elon Musk as an AI and Robotics company, first, and is an organization that builds and sells cars that people buy and drive on their own, second. But, the sudden sale of shares on Thursday suggests that Musk’s communication strategy “Hey, look here!” It is becoming harder to swallow on Wall Street.
If you have lost this part: CEO Elon Musk acknowledged, in response to a question, that Tesla was in a “strange transition period” and that “it could have a few difficult quarters” due to the loss of a $ 7,500 tax credit for US electric vehicle buyers from October and the disappearance of the regulatory credit sales market, which has boosted a significant part of Tesla profits for years.
However, along a one -hour call, Musk hardly mentioned Tesla’s main activity – the sale of cars, which, as my colleague Chris Isidore reports, is not going well.
Musk kept his look firmly on the distant horizon, ignoring the fact that the seeking to be decreasing to the things Tesla really sells at this time, while announcing dreams of a very hypothetical future when the company would build and sell over one million humanoid robots. And mostly analysts who were called to ask questions followed the example, choosing not to look at the decline of the world’s most valuable car manufacturer finances.
Analyst questions focused largely on robotaxis, Tesla’s Full Self driving software, the Optimus robot and other products that have not yet been performed as viable consumer products.
“The company has offered very few details about some of the most important factors” – such as its mysterious new model of lowest price – “making our perspectives rest more in the imagination than realistic goals,” said William Stein of Truist, which has a waiting classification at Tesla in a note after the call.
Even Dan Ives, from Wedbush Securities, known as Tesla’s biggest fans in Wall Street, said Tesla’s performance was a disappointment.
“I wouldn’t say it was a conference call that should be placed in the hall of fame,” Ives to CNN explains on Thursday, while stressing that he is still optimistic about the future of Tesla’s robotics with Musk in charge. “Communication on the call was less than stellar in terms of detail, and I think it definitely contributed to the sale we are seeing.”
Tesla (TSLA) shares fell more than 8% only on Thursday.
For Tesla’s detractors, Musk’s opaque answers have confirmed what they have long seen as an overvalued company that has been betting on Hype.
“The price of stock is no longer based on car sales. It depends almost entirely on the promise of a future driven and autonomous … A future that continues to retreat in reality,” says Gordon L. Johnson analyst, one of Tesla’s greatest critics on Wall Street, in a note. “The key to convincing the market that it is not just a car company is to avoid discussing your car business … If you are trying to justify an assessment of a dollar trillion while your main stagnant business helps keep details as confused as the timeline for your next ‘miraculous product’.”
But to some extent musk is like this and it has always been that way. In your opinion, the focus should not be on what Tesla is doing now. The focus should always be on what Tesla will do one day.
One day, Tesla will soon build and sell an economic car. One day, Tesla will soon build and sell hundreds of thousands, if not more than a million, from Cybertrucks. One day, Tesla will soon build and sell a car that drives itself from Costa to Costa.
One day, soon, Tesla will be an AI and Robotics company.
If not now, it is because if you are focusing on the wrong things. And if not tomorrow, then you just need to hear about what you’ll get, one day, soon.
