Markets
Tesla's Flying Roadster Lifted the Stock 5% Before the Open. It Closed Down 2%, and 7% Lower on the Week
Tesla traded at $381.40 in Friday's pre-market, up 5.2%, after unveiling a Roadster that lifts off on cold-gas thrusters. By the close it was $354.72, down 2.13% on the day and 7.31% on the week. The company reports third-quarter results on October 21 with 486,532 deliveries already known.
On Thursday evening Tesla showed a Roadster that leaves the ground. The demonstration used cold-gas thrusters developed with SpaceX for short bursts of flight, the car was operated remotely, and production is pencilled in for 2028. In the pre-market session on Friday, October 16, the shares traded at $381.40, 5.2% above Thursday's close of $362.44. Then the regular session opened, the Nasdaq fell 2.15%, and Tesla went the other way: a high of $370.50 in the first minutes, a low of $349.33, and a close at $354.72, down 2.13%. For the week the stock lost 7.31%, from $382.70.
The reversal says more about the market than about the car. Every one of the Magnificent Seven except Apple fell on Friday; Meta lost 3.72%, Nvidia 1.43%, and the technology sector 3.02%. A product reveal with a 2028 delivery date is not the kind of news that holds a stock up against a sector-wide repricing, and the pre-market quote came from a session where a few thousand shares can move the price several percent. Analysts at Deepwater called it an "engineering flex" with a SpaceX clue; the market called it a Friday.
The numbers that will move the stock arrive on Wednesday, October 21, after the close, with the call at 5:30 p.m. ET. Deliveries are already public: 486,532 vehicles in the third quarter, above the roughly 462,000 analysts had expected and up from 480,126 in the second quarter, but 2.1% below the 497,099 of a year earlier. The consensus for earnings is about $0.45 a share on revenue near $28 billion, against the $0.33 of the second quarter, which missed a $0.50 estimate. The second quarter's operating margin was 1.4%, free cash flow was a $1.1 billion outflow, and $5.8 billion went into AI infrastructure and robotics.
Those last three figures are the ones to watch. Deliveries rose, so automotive revenue should too; the question is whether gross margin recovered from a level at which the car business barely covers its costs, and whether the capital spending on Optimus and the Terafab project with SpaceX, which reports the evening before, is being funded from cash flow or from the balance sheet. Any update on the robotaxi timetable will get the headlines; the margin line will set the price.
The stock enters the report 8.7% below its $388.56 high of the past three months and 19% above its $297.38 low, with Friday's failed pre-market pop as the most recent data point on how it handles good news. A close above Friday's $370.50 high before Wednesday would mean the market has decided to look through the sector; a close below $349.33 would mean it has not.