Tesla stock slumps 8% after 4th-quarter earnings fall short of forecasts

Tesla CEO Elon Musk.

Susan Walsh/AP

  • Tesla stock dropped as much as 8% in premarket trading on Thursday.
  • The electric-vehicle company’s fourth-quarter earnings fell short of analysts’ forecasts.
  • Elon Musk’s automaker also benefited from $401 million in sales of regulatory credits.
  • Visit Business Insider’s homepage for more stories.

Tesla shares fell as much as 8% in premarket trading on Thursday, after the automaker reported fourth-quarter earnings on Wednesday that fell short of Wall Street’s forecasts.

Elon Musk’s electric-car company grew its revenues by 46% year-on-year to $10.7 billion. However, its adjusted earnings per share were $0.80 – below the $1.01 expected by analysts.

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Moreover, Tesla’s financials were flattered by sales of regulatory credits to rivals tripling year-on-year to $401 million. The company’s entire net income in the period was $270 million.

Tesla stock skyrocketed an astounding 700% in 2020, and was up another 22% this month as of Wednesday’s close. The breathless rally has boosted its market capitalization to north of $800 billion, making it one of the highest valued companies on the US stock market despite delivering only 500,000 cars to customers last year.

The automaker has benefited from immense enthusiasm around Musk and the electric-vehicle industry, notably among members of Reddit’s Wall Street Bets forum, who have boosted other stocks such as GameStop and AMC to eye-watering highs in recent days.

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Tesla’s heady valuation has attracted prominent short-sellers such as Jim Chanos, best known for shorting Enron, and Michael Burry, the investor whose billion-dollar bet against the US housing market was chronicled in Michael Lewis’ book “The Big Short.”

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