Liam Denning, Columnist

Tesla Delivers, But the Stock Demands Much More

The electric car maker must keep up the latest quarter's performance to justify the hopes already embedded in its valuation.

October 25, 2018 at 12:10 AM UTC

By Liam Denning

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Tesla delivered, but the stock price demands more.
Photographer: Joe Raedle/Getty Images North America

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With numbers like these coming, you have to wonder why Elon Musk was so vexed by the short sellers. Because, in the same quarter Tesla Inc.’s CEO indulged in that weird $420 takeover episode, the electric car company actually generated very good results.

As promised, Tesla generated a GAAP profit of $1.75 per diluted share. It also turned in positive cash from operations of almost $1.4 billion, and generated free cash flow for the first time in eight quarters, to the tune of $881 million. Working capital changes helped that some, and capital expenditure came in a bit light. But it is still an impressive number. This enabled Tesla to end September with just shy of $3 billion in the bank, reversing the steady increase in net debt: