July 22, 2020 | Tesla Beats Expectations of the Usual Knobheads

Tesla eked out a modest profit for a fourth straight quarter, earning a listing in the S&P 500. The stock laid an egg in after-hours trading, however, making money only for naked-option sellers who cashed in on some of the juiciest options premium traders can recall. Such are the rewards of the most manic, delusional buying spree in the history of the stock market. It could have surprised no one that the company’s bean counters were able to jigger Tesla’s numbers into-the-black, since that was all that was required of them to earn the S&P listing. What did surprise is that analysts had expected Musk to report a loss due to a Covid-induced sales-and-dsitribution slowdown.

Of course, we knew going in that the average Wall Street analyst couldn’t hold down a CETA job sharpening pencils, but in the end the miserable hacks did their job, lowballing estimates so that the company could not but beat them. Tesla’s egregious failure to go nuts after the close, however,  is likely to exert some drag on the otherwise rabidly exuberant Nasdaq index for the remainder of the week. Look for DaBoyz to lighten their offers in order to stretch out the hours and days they can distribute stock to the rubes. Not that the wilding spree is necessarily over. Check out my forecast for the S&P 500 (SPX) below if you want to see how much higher it could go.

Rick Ackerman July 22nd, 2020

Posted In: Rick's Picks

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