Tesla stock rallies as Elon Musk apologizes, promises future profits
Tesla CEO Elon Musk extended an olive branch to Wall Street during a conference call with analysts, fueling a big rally in the company’s shares Thursday.
The electric car maker also continues to target positive cash flow and quarterly profits in the second half of the year amid expanded production of the Model 3. Despite reporting a record quarterly loss Wednesday, Tesla burned through less cash than Wall Street feared in the second quarter.
Tesla’s stock jumped more than 10% in recent trading, setting a pace to record its best one-day gain since November 2015.
Musk’s remorseful earnings call came after he cut off questions from two analysts on a previous conference call to discuss first-quarter earnings in May. He said there was “no excuse for bad manners.”
“My apologies for not being polite on the prior call,” Musk told one analyst.
Investors saw the apology as a sign that Musk, who has also criticized media reports and traders betting against the stock, “can be a plus to the investment narrative, not a minus,” KeyBanc Capital Markets analyst Brad Erickson wrote in a note to clients cited by MarketWatch.
Erickson added that Musk gave “maybe the most valuable apology of all time.”
Tesla shares had been down more than 3% on the year as of Wednesday’s close.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 339.64 | -2.39 | -0.70% |
Investors have been closely following Tesla’s progress in ramping up production of the Model 3. After facing earlier delays, Tesla met an internal goal of building 5,000 Model 3 vehicles per week by the end of June. The company said late Wednesday it plans to log a weekly production rate of 6,000 Model 3s by late August. In the long run, Tesla expects to make 10,000 of the sedans each week, although it didn’t provide a timeframe.