Tesla's earnings shocker is is set to wipe $5.6 billion off the stock - and 'things could unravel quickly' for Elon Musk
- Tesla's shares crashed in premarket trading - falling as much as 12% in premarket trading after its Q2 earnings report.
- Earnings per share and total revenue missed analysts expectations.
- "There's only so long that investors will tolerate it," said one analyst. "Investors need to be very patient or I feel things could unravel quickly for Musk."
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Tesla had an earnings shocker on Wednesday evening, as the company missed expectations on revenue and earnings, sending its stock spiraling downward.
Shares fell by as much as 12% in premarket New York trading on Thursday, which would wipe about $5.6 billion off the electric car company's market capitalization once the market opens.
"It's another disappointing earnings report from Tesla as it continues to work towards becoming consistently profitable and being able to deliver the number of cars demanded by buyers and investors," said Craig Erlam, senior market analyst at Oanda. "The company has never lacked ambition, rather the ability to deliver on it."
Erlam added: "There's only so long that investors will tolerate it and the reaction to the earnings report says it all. I still think there's reasons to be optimistic with the company, but investors need to be very patient or I feel things could unravel quickly for [Elon] Musk."
Business Insider reported that Tesla's second-quarter loss was bigger than expected, coming in at -$1.12 per share versus an expected loss of -$0.31 per share.
Revenue was also grim, missing expectations by $100 million - $6.35 billion versus an expected $6.45 billion. This means that the company reported an overall loss of $408 million, which was an improvement on the $702 million loss in Q1.
Questions marks are now being raised about the profitability of the company, especially with the high profile walk out of Chief Technology Officer JB Straubel.
The Guardian reported that he said: "This has nothing to do with lack of confidence for the company," Straubel said on the call. "I will be helping as I can, just no longer in an executive role."
Last month, the company reported a record number of cars produced and delivered from April to June, the company produced 87,048 cars and delivered 95,200.
For the full earnings report click here.
