Tesla Inc.’s (NASDAQ:TSLA) CEO Elon Musk has long been a controversial and vocal mouthpiece for the electric car company, often to the detriment of the company’s stock. Musk’s antics and off-the-cuff remarks in the news and on Twitter have provided fuel time and time again for a rather large bearish contingent.
Last week’s trip onto the earnings stage was no different for Tesla’s CEO. Musk offhandedly dismissed concerns about Tesla Model 3 cancellations — orders now stand at about 455,000 compared to Musk’s proclamations to the press of about 513,000 preorders — as inconsequential and that original numbers were “just a guess.”
What’s more, he often handles concerns regarding Tesla’s cash burn in much the same way. Musk clearly has the mentality of someone more focused on the goal than on how to get there or how much it will cost.
To that end, Musk told investors following last week’s quarterly earnings report that: “When we make mistakes, it is because we are stupid, not because we are trying to mislead anyone.”
With statements like that flying around, it’s no wonder that TSLA stock is the most shorted stock on Wall Street right now. It’s hard to build confidence among traditional investors when your CEO is a bit on the flippant side.
However, as Tesla’s quarterly earnings performance shows, it may finally be time for TSLA stock bears to set Musk’s irritable inaccuracies aside and re-examine their stance on the company.
Tesla’s Shocking Results
Despite TSLA stock advancing more than 50% since the start of this year, Tesla the company has attracted a veritable flood of negativity — no thanks to Elon Musk.
Heading into last week’s earnings report, about $9.03 billion worth of TSLA stock was sold short — more than any other company on Wall Street. (A short sale is a bearish bet where a trader expects the shares of the company to fall.) In fact, Tesla’s short position stands about $2.4 billion more than AT&T Inc., the second most shorted stock.
But short sellers weren’t the only ones with a dour opinion of Tesla. Consensus analyst earnings expectations stood at a loss of $1.80 per share, but the Street’s whisper number indicated that traders were expecting an even wider loss of $1.87 per share.
What’s more, analysts were looking for negative cash flow and capital spending to come in far worse than CEO Elon Musk had previously provided guidance for. Tesla smashed all of those targets.