Tesla Stock Tanks 8% After Announcing Store Closures, Layoffs And First Quarter Loss
CNBC- Tesla shares fell 8 percent Friday, a day after the electric car maker said it will be shuttering some stores and cutting jobs to reduce costs. CEO Elon Musk also said Tesla won’t turn a profit during the first quarter as it works to deliver its mid-size Model 3 sedan at a more affordable price tag of $35,000. “Given that there is a lot happening in Q1, and we are taking a lot of one time charges, and there are a lot of challenges getting cars to China and Europe, we do not expect to be profitable in Q1,” Musk said on a call with reporters Thursday evening. “We do think that profitability in Q2 is likely.”
The release of the cheapest Model 3 so far has elicited a range of reactions from investors. Some analysts say the move is ultimately a step Tesla must take to fulfill its goal of becoming a major automaker, but others worry the car will cut too deeply into Tesla’s profits.
Is that good? Is the line on the graph supposed to fall off a cliff like that? Is that the indicator of a thriving business? I don’t know much about this stuff so somebody get back to me.
And now we know why Tesla announced yesterday that they’re offering a cheaper model of the Tesla 3. They did it because they knew this bad news was coming and that way they can be like, “Yeah but now we’ve got a car people are actually gonna buy! Profits are gonna go through the roof!” They won’t. Tesla will continue to struggle, Elon will say Tesla is thriving and nothing will change. Lather, rinse, repeat.
This is one of my favorite/least favorite things that Elon does
“Given that there is a lot happening in Q1, and we are taking a lot of one time charges, and there are a lot of challenges getting cars to China and Europe, we do not expect to be profitable in Q1,” Musk said
You gotta think stockholders don’t love being told, “Yeah we didn’t expect to be profitable.” He hedges with saying that they’ll likely be profitable in the second quarter, but if they’re not, he’ll just say they’ll likely be profitable in the third quarter and so on and so forth.
It’s really a microcosm of everything Elon Musk says about everything. He pushes everything off into the future and says it’ll happen one day. One day we’re going to Mars. One day moving to Mars will cost less than $100,000. One day there will be tunnels under Los Angeles. One day he’ll save that Thai soccer team. One day Tesla will be a profitable company. One day one day one day one day one day one day. Around and around we go! It never ends!