Tesla (TSLA), CEO Elon Musk has been very active on Twitter over the years, but the social media platform is where the company's leader has got big problems. Shares in the electric vehicle maker have lost more than half of their value since "funded secured" tweet high, with bonds of the name trading in the unwanted status level. Over the holiday weekend, Musk once again took to the social media platform, with an answer to a tweet below that can lead to a lot of confusion, and definitely needs some clarification from the company.
( Source: Elon Musk Twitter, seen here )
For those who are not familiar with the site, CleanTechnica is definitely pro-Tesla. If you read through the article itself, you can see that their attitude is completely one-sided, with references to "Wall Street manipulators, short sellers, etc." In addition to pro-Tesla coverage, the site also encourages you to use its free supercharging referral code, as it will help them earn more chances of winning Tesla cars in the final round of the referral program. However, the key I am discussing today is in relation to the following paragraphs from the linked article above:
Apart from my page note above, I urge everyone to be cautious about goals and forecasts like this. It appears that Tesla is still working to slowly increase production capacity, still being able to face many delivery barriers before the end of the quarter, and it may be more likely to deliver 74,000 or so cars in the quarter. Who really knows? Keep in mind that Tesla is now about to "relax" its wave-like delivery plan – it can come up with unexpected challenges. In addition, Elon Musk doesn't even know how many people will order Tesla cars tomorrow, next week or next month.
The 74,000 number comes from Troy Teslike on Twitter, who has estimated Tesla numbers, as well as collecting guesswork from others on the social media platform over time. Like many, he was far too optimistic about Q1 2019, and estimated nearly 68,000 vehicle deliveries, which Tesla missed badly. As I recently discussed, it does not look as good to the company during the current quarter, bringing up the big question being asked today.
What is Musk that responds to "Yup" to? I guess he's talking about CleanTechnics's point that everyone overreacted to the leaked emails of recent weeks. But let's not forget what we have seen before, as in Q1, where the orders were so high that Tesla's system crashed, but it was a big miss when they actually announced the numbers. If Tesla were to miss, it raises questions about how truthful management was when you guided the guidance to sell the last capital increase. Next week we will receive a number of estimates for Tesla deliveries in the US / Europe in May, which will make it a little clearer what Tesla can announce in early July.
Musk has had problems with the SEC over his Twitter use, and this latest answer to the site was probably not a good idea. While most likely not referring to a delivery estimate that would be a great tutor, he should not allow his tweets to be so open to interpretation. It obviously didn't work well a few months ago with its "500k production" tweet. Finally, investors should be concerned not only because of Tesla's potential to miss guidance, but because Musk is still not ruled on Twitter, which remains a major risk factor for the shareholders.
Tesla shares are currently on multi-year downs, but investors can still lose big if the company does not get demand levels to where they need to be. Right now, it seems that the overall consensus is in the middle of the 70k series for deliveries in Q2, which would be much lower than official guidance, but support the "74k" number quoted in the CleanTechnica article. It's an annual run of just 300,000 cars, not just under guidance, but probably not enough to get sustainable profits and cash flow. Tesla has a few demand handlers that can withdraw to model 3, like the right wheel drive markets and expand leasing, but this was a company that would be half a million production cars in 2018. With guidance as the continuous being missed, it's not a surprise that The investors finally start losing faith in the company, and thus the shares and bonds are hit hard.
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