Summary
- Tesla stock rose 22% after Q3 2024 earnings release, adding $150 billion to market cap and causing short sellers a $3.5 billion loss
- Q3 results beat expectations, with Elon Musk predicting 30% growth in vehicle sales for next year
- Tesla’s second-largest single-day rally since going public resulted in $1.7 billion YTD profit for short sellers turning into a $1.8 billion loss
- Optimistic guidance from Tesla was noted as a key factor in the significant stock increase
- Analysts were also surprised by Tesla’s Q3 results, as the company reported a 9% rise in revenue and exceeded automotive gross margin expectations
Article
Tesla stock experienced a significant 22% increase following the release of the company’s Q3 2024 earnings, adding $150 billion to its market cap in a single day. This rise also resulted in a $3.5 billion loss for TSLA short sellers, erasing their year-to-date profit. The results were surprising, with Tesla surpassing expectations and Elon Musk mentioning a potential 30% growth in vehicle sales for the following year.
The upbeat results led to Tesla’s second-largest single-day rally since going public. By the end of the trading day, Tesla stock was up 22%, its market cap had increased by $150 billion, and TSLA shorts had suffered a $3.5 billion blow. This resulted in a total reversal for short sellers, with their year-to-date profit vanishing and flipping to a loss of $1.8 billion for 2024. Steve Sosnick, chief strategist at Interactive Brokers, highlighted Tesla’s optimistic guidance as a key factor in the market’s reaction to the earnings report.
Analysts and short sellers alike were taken by surprise at Tesla’s Q3 results. Despite expectations of a 10% drop in quarterly profit, the company reported a 9% increase in revenue from the previous year period. The automotive gross margin, excluding regulatory credits, also exceeded expectations. The market’s willingness to trust Elon Musk’s assertions about sales growth played a significant role in the stock’s performance following the earnings call.
The sudden and substantial increase in Tesla stock value on Thursday had a significant impact on TSLA short sellers, erasing their gains for the year in just one day. Analysts were caught off guard as well, with Tesla’s Q3 results surpassing expectations. The company’s optimistic guidance for future sales growth contributed to the market’s positive reaction. Overall, Tesla’s performance in Q3 2024 exceeded projections and led to a substantial increase in its market capitalization.
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