Investor's Corner
Key takeaways from Tesla’s Q3 report and Q&A with Musk
Tesla released its third quarter earnings after the closing bell on Wednesday, surprising Wall Street after posting nearly $22 million in profit in the quarter. This is in sharp contrast to previous analyst expectations polled by FactSet which expected Tesla to report a GAAP loss of 53 cents a share in the third quarter, and an adjusted loss per share of 22 cents, narrower than the adjusted loss of 58 cents a share in the year-ago period.
Estimize, which crowdsources estimates from buy-side and sell-side analysts, fund managers, hedge funds and academics, expected Tesla to report an adjusted loss per shares of 4 cents. Estimates on E-Trade were between a loss of 4 and 7 cents. Noted Tesla Analyst Ben Kallo of Baird, expected non-GAAP earnings per share of $0.72.
All in all, given all these numbers, Wall Street was basically expecting a breakeven quarter.
Revenue
Total reported Q3 GAAP revenue was $2.30 billion, up 145% from Q3 2015. Tesla matched the higher end of the expectations. Another good news for the stock.
MarketWatch, in a live blog, called it a “Tesla earnings shocker – Actual profit”. Similarly, Bloomberg was surprised and posted the headline “Tesla Posts Rare Quarterly Profit as Musk Readies for SolarCity. The Wall Street Journal landed the news on its front page with the headline “Tesla Shares Jump after Posting Best Quarterly Sales Ever.”
I believe investors and analyst expectations were so low, that the clearly huge profit numbers were a “shock” to the market. This is Tesla first profitable quarter since the third quarter of 2014, a full 2 years ago, when Tesla eked out a minuscule profit of 2 cents a share. Tesla had reported losses ever since.
Stock Reaction (after hours)
The stock ended the day regular session at $202.24, down 10c for the day. The stock is down heavily from the $267 in early April, around the time Tesla started taking reservations for the Model 3.
The initial reaction of traders was very positive, as right after the quarterly results were published, Tesla shares rose as high as $215, about 7% in after-hours trading, with very high volume.
Source: optionhouse.com
The conference call did not change much as the after-hour session closed at $212, or up about 5% so we would expect a higher opening on Thursday.
Analysts polled by TipRanks have an average rating of hold on the stock, with an average stock price target of $199.13, about even from current levels at the close. These levels may well be adjusted tomorrow on the upside 5-7%, given the huge beat on expectations.
Source: TipRanks
Conference Call Q&A Top Quotes
Besides the financial report, investors wanted to hear about future production, which they are counting on to justify the still fairly high Tesla share price.
In the Tesla Third Quarter 2016 Update letter, Tesla noted that they “achieved record production levels in Q3, raising to 25,185 vehicles for an increase of 37% from Q2, and an increase of 92% from Q3 last year.” Also, Tesla “maintained guidance of 50,000 new vehicle deliveries for the second half of 2016 […] despite the challenges of winter weather and the holiday season.”
Best Quarter Ever
At the start of the conference call Elon Musk called the “quarter the best ever,” with fourth quarter expected to be great as well, with Q4 to be profitable even including non cash stock based expenses.
Musk called it “One of the best moments in Tesla history.” Elon also addressed rumors of widespread discounting as reason for profit: called the, “absolutely false,” and pointed out that “vehicle profitability increased without ZEV credits.”
Model 3
Elon reiterates volume production for Model 3 in second half of next year. The terms that the company are getting for suppliers is much better. Model 3 production and logistics are way faster, says Musk. He also forecasts an increase in gross margin, even after big beat on that metric in the quarter just reported. As a result, Elon does say he doesn’t expect to raise more capital in Q1 2017, though he won’t rule it out.
Musk dodged a question about Model 3 deposits: “That’s not something we comment on and not something that deserves merit,” he says.
Elon listed his 3 top priorities: Model 3 production schedule, advancing autopilot software, and ramp up of 100 kWh production line. After the call, Musk will be at the 100 kWh production line as “demand is high,” he says.
SolarCity
The SolarCity deal about “cash neutral” for Tesla, Musk says. If this is indeed found to be true, it may help with the approval of the deal coming up soon for vote by the shareholders.
“It’s important to have ‘tight control’ of solar panels production in order to have a ‘beautiful’ product. Confident it would have the best product at the best price, and one that would look better as well,” Musk says.
The solar roof product that will be offered by combined Tesla-SolarCity will “look better than a normal roof” and will be aimed at new houses being built and homes where the roof needs to be replaced anyway. Musk said that “People will be surprised by the product to be unveiled on Friday. It exceeded my expectation,” he says.
Full Autonomy
Elon said that “radar is moving from supplemental to primary sensor. Vision is still the main thing, but radar can be primary so you can take action based on radar, similarly as you can take action based on vision.” Elon also called out MobilEye for “issuing bullshit” on radar vs. vision argument in autonomous driving.
According to Musk, “Teslas on Autopilot are logging 1.5 million miles per day through all kinds of road conditions and weather all across the world.”
All in all no real surprises out of the conference call, and the good thing is that the stock held steady during the call. Definitely a good day for Tesla.
Elon Musk
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
A single line in SpaceX’s amended S-1 just sent Tesla stock down 5% in one day.
A single line buried in SpaceX’s amended S-1 filing is doing more to move Tesla’s stock price than anything Tesla itself has announced in months. The clause, disclosed as SpaceX prepares for what could be the largest IPO in Wall Street history, states that the company “may issue a significant amount of equity in connection with future transactions.” While this may be seen as boilerplate language in S-1 filings, the historical ties between SpaceX and Tesla, and with Elon Musk reportedly discussing a possible merger with close colleagues, investors are interpreting it as something closer to a signal.
The concern among institutional investors like Gary Black, managing director of The Future Fund, pointed directly to the amended filing on X, saying it “strongly suggests more SPCX equity will be issued,” which could potentially be used to acquire Tesla. He estimated such a deal could be 28% dilutive to Tesla shareholders since SpaceX would likely command a significantly higher valuation multiple. Black added that institutional investors he knows hate the idea of a combination because they prefer pure plays over conglomerates, which he said “nearly always gravitate to the lowest common multiple.”
The Tesla and SpaceX merger everyone is talking about is quietly building
The bull case runs the math differently. Tesla influencer and retail shareholder advocate AleXandra Merz pushed back on what she called a widespread misunderstanding of how merger-of-equals deals actually work. Rather than simply splitting the difference between two market caps, a merger exchange ratio is negotiated based on relative fair market values, meaning the lower valued company typically sees its stock reprice upward toward the deal value.
Under her model, SpaceX enters at a $2.5 trillion valuation and Tesla at $1.6 trillion, producing a combined entity worth $4.1 trillion split evenly between both shareholder groups. That implies Tesla’s side of the deal would be valued at $2.05 trillion, a gain of roughly $450 billion from its current market cap. She cited Dow-DuPont and CBS-Viacom as historical examples of how markets reprice both companies toward the announced exchange ratio after a deal is unveiled.
What does a Merger of Equals mean to Elon’s compensation packages?
Well, it changes everything.
Enjoy https://t.co/uekCldyITw pic.twitter.com/kolq1C9qTu
— AleXandra Merz 🇺🇲 (@TeslaBoomerMama) June 1, 2026
The SpaceX S-1 amendments also revealed just how much financial infrastructure already binds the two companies together. As Teslarati has reported, SpaceX purchased $697 million in Tesla Megapacks, $131 million in Cybertrucks, and the two companies have shared supply chain resources, and semiconductor fabrication plans since well before any merger conversation became public. A retail poll by Tesla influencer Sawyer Merritt is finding that 36% of respondents do not plan to buy SpaceX shares at IPO and 15.3% saying their decision depends on the valuation.
Do you plan on buying @SpaceX stock at its IPO?
— Sawyer Merritt (@SawyerMerritt) June 1, 2026
Whether the merger happens or not, the amended filing is seemingly moving markets and sharpened a debate that is no longer theoretical. SpaceX is weeks away from trading publicly, and Tesla shareholders are now watching every word of every filing for clues about what Musk plans to do next.
Elon Musk has firmly denied recent media reports suggesting that SpaceX has reduced its target valuation for an upcoming initial public offering.
The denial came directly from the SpaceX and Tesla frontman on his social media platform X, where he responded with a single word, “False,” to a post from ZeroHedge that cited Bloomberg sources.
This swift rebuttal underscores Musk’s ongoing effort to manage speculation surrounding one of the most anticipated market debuts in recent history.
False
— Elon Musk (@elonmusk) May 29, 2026
According to the disputed reports, SpaceX had lowered its IPO valuation goal to at least $1.8 trillion from previous ambitions exceeding $2 trillion.
The claims emerged amid growing anticipation for the company’s confidential S-1 filing, which positions it for a potential public listing as early as June.
Some had pointed to strong revenue growth, particularly from the Starlink satellite internet service, which contributed heavily to the firm’s 2025 figures of $18.7 billion. Yet challenges persist in other areas, including substantial investments and losses tied to ambitious projects like Starship development and artificial intelligence initiatives, which plan to make life multiplanetary eventually.
Musk’s response highlights a pattern in which he actively counters what he views as inaccurate portrayals of his companies’ trajectories.
SpaceX, already valued privately at extraordinary levels, stands as a cornerstone of Musk’s empire alongside Tesla and xAI. The entrepreneur has long emphasized the transformative potential of reusable rockets and global broadband access, factors that fuel investor enthusiasm despite operational hurdles.
By rejecting the valuation downgrade narrative, Musk signals confidence in SpaceX’s fundamentals and its readiness for public markets on terms favorable to its long-term vision. People have been waiting a very long time to invest in SpaceX, and the valuation, as well as the introductory share price, is not going to need adjusting.
They’ll have plenty of suitors.
This episode reflects broader dynamics in the technology sector, where rumors often swirl around high-profile entities. Musk’s direct engagement with media narratives serves to maintain transparency and control the narrative around his ventures.
As SpaceX prepares for greater scrutiny in public markets, the founder’s denial reinforces optimism about its prospects. Supporters argue that the company’s innovative edge positions it for enduring success, far beyond short-term valuation debates. With the denial now public, attention turns to forthcoming regulatory filings that could provide clearer insights into SpaceX’s strategy and financial health.
The coming weeks promise to reveal more about how SpaceX will transition into a publicly traded powerhouse.
Elon Musk
The Tesla and SpaceX merger everyone is talking about is quietly building
Tesla and SpaceX may be closer to merging than Wall Street or either company is admitting.
Elon Musk has reportedly discussed merging Tesla and SpaceX with people close to him, according to CNBC, which cited sources familiar with the conversation. Tesla employees have long expected such a transaction and the topic is openly discussed internally, according to internal sources. With SpaceX is days away from kicking off its Wall Street roadshow for what could be the largest IPO in market history, this would be the first time the company will have public market currency to execute a stock-for-stock deal with Tesla.
The financial logic for a merger would make sense. A combined SpaceX and Tesla would create a conglomerate spanning rockets, satellites, electric vehicles, AI infrastructure, and energy storage valued at roughly $3.35 trillion to $3.6 trillion based on SpaceX’s IPO target range and Tesla’s current market capitalization. The two companies are already more intertwined than most people realize. SpaceX bought $697 million worth of Tesla Megapack systems for xAI data centers and $131 million worth of Cybertrucks. Tesla invested $2 billion in xAI, which subsequently merged with SpaceX. Past transactions also include Tesla selling solar equipment and parts to SpaceX, and SpaceX helping with Cybertruck materials.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Musk himself signaled where this was heading in November 2025 when he posted on X, “My companies are, surprisingly in some ways, trending towards convergence.” Tesla and SpaceX announced a joint semiconductor fabrication facility in Austin called Terafab on the Gigafactory Texas campus, covering two advanced chip factories, with one serving Tesla’s AI needs for vehicles and Optimus robots, the other targeting space-based data centers under SpaceX’s infrastructure vision.
Wedbush analyst Dan Ives places the probability of a merger at 80% to 90% with a target completion in the first half of 2027. The mechanics of a deal became possible the moment SpaceX filed its S-1. Legal experts said a merger likely would not spark antitrust issues but would raise concerns among shareholders in each company, with questions around which company would be the parent, how a stock swap would take place, and who determines the appropriate price. Musk holds about 20% of Tesla’s equity but controls 85.1% of SpaceX’s voting power through a super-voting share class, meaning he would largely be negotiating the terms with himself.
Not everyone is convinced the timing is imminent. Traders on Kalshi place only 33% odds that a merger will happen before May 2027. The more immediate concern for Tesla shareholders is whether the SpaceX IPO pulls capital and Musk’s attention away from Tesla before any merger consolidates the upside for both.
What is clear is that the structural groundwork is already being laid. The Terafab announcement, the xAI merger, the shared supply chain, the cross-company balance sheet transactions, and now the IPO all point in the same direction. Whether the merger follows in 2027 or later, the two companies are already operating more like divisions of a single entity than independent competitors.
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
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