Tesla, Inc. (NASDAQ:TSLA) stock tanked nearly 10% Thursday as investors reacted negatively to what at the outset seemed like a robust quarterly report.
A Tesla bull delved into what might have acted as deterrents, sending investors scurrying for cover.
What Happened: Elon Musk should stop talking about autonomy until it works near flawlessly and instead focus on his amazing existing businesses, said Future Fund’s Gary Black.
If the billionaire talked about EVs, where Tesla is a dominant player, and energy, which saw profits triple and gross margin that exceeded that of the EV business, the stock would have been higher, he said.
“Imagine if Tim Cook said $AAPL is going to cut price on iPhones and make it up on cloud storage and Apple Music and other services – that would never happen,” Black said.
“TSLA fundamentals are outstanding but the fact gets lost in all the noise,” he added.
The Positives: The analyst said there were lots of positives in the quarter such as the Cybertruck launch, energy profits, deflationary commodity costs, and a potential full-self-driving licensing deal.
“But the most important message on which investors wanted clarity – pricing and gross margins going forward – was garbled,” the fund manager said.
“Why tell potential EV buyers additional $TSLA price cuts may be coming? You’re just telling buyers to wait,” he said.
Black said he would have preferred to hear more about the product roadmap. Price cuts are promotional narcotics, which work only in the short run, he added.
Produced in association with Benzinga