Why Tesla's Stock Is Down

Tesla Inc. (NASDAQ: TSLA) shares fell roughly 13% Thursday after the company reported one of its largest earnings misses in years. Tesla posted Q2 adjusted earnings of 33 cents per share, badly missing the Wall Street consensus of 50 cents. Revenue of $28.24 billion beat expectations, driven by record deliveries of 480,126 vehicles up 25% year over year. But the beat came at a cost. Jon McNeill, Tesla's former president and current CEO of DVx Ventures, told Bloomberg the numbers tell a simple story: "They are falling to the temptation of feeding the top line, which is a beast to continue to keep growing, with discounts." He added: "This is not an AI investment story." The underlying numbers back him up. Operating margin narrowed to just 1.4%, down from 4.1% a year ago. Regulatory credit revenue a historically high-margin revenue line plunged 67% to $146 million. Capital expenditures surged 142% to $5.79 billion, and free cash flow turned negative at -$1.09 billion. The only figure flattering the quarter was a $1.005 billion unrealized gain on Tesla's SpaceX equity stake but SpaceX shares have declined since the quarter ended, meaning that gain may have partially eroded. Tesla shares are now down roughly 17% year-to-date. Prediction market odds of a Tesla-SpaceX merger being officially announced by year-end stand at 23% on Polymarket. --- #Tesla #TSLA #ElonMusk 🌐 Find more market-moving insights at https://www.benzinga.com — your one-stop destination for the latest financial news, data, and expert analysis to stay ahead of the markets. 🖥️ Want the same tools the pros use—without the $10K Bloomberg terminal? Benzinga Edge gives you real-time portfolio alerts, weekly stock picks, and pro-grade research in one command center. 👉 https://bit.ly/4unSKiB ------------------------------------------------------------------------------------ 📲 Follow us on socials @benzinga 🔔 Subscribe To The Channel: https://www.youtube.com/@Benzinga ------------------------------------------------------------------------------------ ⚠️ Disclaimer: Investing in financial markets carries risk, and there are no guaranteed returns. All information is for educational purposes only and should not be taken as financial advice. Always do your own research and speak with a qualified financial advisor before making investment decisions. Only invest what you can afford to lose. Past performance does not guarantee future outcomes.