The electric spin machine
Tesla, that sleek looking and very, very fast electric car-of-the-future, yesterday announced a bigger than expected net loss of $320m in the three months ended in December, compared with a loss of $230m in the previous corresponding period.
This was the company’s eleventh consecutive quarterly loss. So, how did the share-market respond? In this crazy time, W&D perhaps shouldn't have been surprised that its share-price rose more than 14%.
It's all about the promise: Tesla said it expects to deliver between 80,000 to 90,000 of its Model S and Model X vehicles in 2016, eclipsing Wall Street’s estimates for 76,200 deliveries.
W&D is pondering the elegant spin here: (1) announce a bigger loss than expected; (2) promise a better tomorrow; (3) shift attention to new model introductions. Then (4) watch the share price rise.
W&D dips his lid.