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Elon Musk Hits Back At The Economist, Says Tesla Will Be Profitable And Cash Flow Positive In Q3 And Q4

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Elon Musk Hits Back At The Economist, Says Tesla Will Be Profitable And Cash Flow Positive In Q3 And Q4
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Tesla Inc (NASDAQ: TSLA) CEO Elon Musk fired back at The Economist late Thursday in response to a report that the yet-unprofitable tech company is “looking more perilous.”

Musk asserted Tesla will be profitable and cash-flow positive by the third quarter of this year and will not need to raise capital to achieve its objectives.

By The Economist’s assessment, bolstered by Jefferies’ forecast for a $2.5 billion to $3 billion raise this year, Tesla is heading for a “cash crunch” amid a “financial squeeze that could eventually put Tesla over the edge.”

Why It’s Important

Musk’s reiterated confidence pressed the stock up 2.6 percent Friday morning, advancing a recovery from a series of poorly received reports.

Tesla saw a $100 turn in its shares from late March through early April as wary investors took stock of crash investigations, production target misses, a recall and their implications for Tesla’s balance sheet.

Musk’s offhand jokes about bankruptcy did little to correct the narrative, but Thursday’s more sober defense seemed to improve market confidence.

What’s Next

Some analysts say Tesla’s financial capabilities hinge on its Model 3 achievements, so most will be watching for second-quarter production figures. Management guided for a 5,000-vehicle-per-week run rate by the end of the period.

Tesla's stock was trading around $301 in Friday's pre-market session.

Related Links:

Gordon Johnson: Tesla Has 'Bleak' Future, Will Drop To $84

Tesla's Back In Favor, But Goldman Sachs Is Still Selling

Image credit: Heisenberg Media, Flickr

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