Investor's Corner
Tesla stock (TSLA) one week after Q2 2016 Report
Post Q2 Report Action
As we previously reported, the Q2 quarterly results were “mixed”:
- Revenue matched expectation, a positive for Wall Street;
- Earning losses were higher than anticipated, a negative, but for a company like Tesla, where the stock price is based on future expectations, the earning numbers are really not what counts;
- Slightly increasing gross margins, a positive;
- Practically zero ZEV credits for the quarter, a negative;
- Production and demand on track to support 50,000 deliveries in 2H 2016, a positive;
- Lower production numbers than previously anticipated, a negative.
When you have such a mix of positives and negatives, it is fairly normal for traders to have a “subdued” response, unlike the usually wild responses to results that are big misses or big beats on expectations.
Accordingly, this time around the technical response of the stock market to last week’s Tesla Q2 2016 report has been “muted.” The stock has been in “compression” (a horizontal back and forth) since the report, staying in the $225-$230 range, but overall 12-month Analyst Price Targets have actually decreased with the average dropping from $277 to $244.
Looking at more details of the reactions to the report, this is a small sample from Top Analysts, noting that none of them changed their position.
Alexander Potter of Piper Jaffray says “Teslas untouchable brand helps investors look past million-dollar losses.”
“It’s hard to recommend a cash-burning company with such an uncertain outlook,” said Potter, who reiterated a neutral rating and $223 price target on the stock. But consumers and investors still seem captivated by Tesla’s products, said Potter. And as long as the company “retains this aura,” its stock multiple will “probably stay buoyant,” he said.
Brad Erickson of Pacific Crest says “The risks still outweigh the rewards.”
“Brad rattled off a number of challenges Tesla still needs to tackle in a note to clients. But he reiterated a sector weight rating on the stock, said Tesla’s cash burn wasn’t as bad as expected during the quarter, and maintained the belief that the company’s longer-term vision is “second to none.”
Ben Kallo of Robert W. Baird says “Focus [is] on Tesla (TSLA) Production Ramp and Long Term Goals, Not Q2 Miss.”
Kallo commented, “Q2 revenue was in line with our estimate, but TSLA missed on EPS with higher-than-expected OPEX. Additionally, gross margin missed consensus estimates and was pressured during the quarter with the Model S refresh and X ramp, but automotive gross margin improved sequentially, which was better than we expected. Importantly, TSLA reaffirmed its 2H:16 delivery target of ~50k vehicles, expects margins to ramp in 2H:16 given higher manufacturing efficiency, and the Model 3 remains on track for 2H:17 production.”
Kallo also covers SolarCity (SCTY) and he commented that “Although SCTY has a 45-day go-shop period which could provide additional upside, we believe it is highly likely the TSLA and SCTY merger will go through, and we are moving to the sidelines.”
Colin Rusch of Oppenheimer “noted that Tesla appears to be taking on increasing responsibility when it comes to technology development.”
“Rusch wasn’t surprised by Tesla’s quarter, and the firm remains on the sidelines until Tesla can show some progress toward profitability. It also appears to have taken a hard line with suppliers on timelines, pricing and allocation of resources,” he explained. “While we see potential benefits, we note increasing risk on supplier pushback.”
Ryan Brinkman of J.P. Morgan noted that “JPMorgan cuts Tesla estimates on higher operating expenses.”
“To reflect lower revenue and higher operating expenses following the company’s Q2 results, Brinkman cut his 2016 earnings per share estimate for Tesla to (32c) from $1.60. The analyst notes his 2016 earnings estimate was $4.62 a year ago and $2.74 at the start of this year. This reflects the “degree of consistent ratcheting down of near-term earnings,” Brinkman tells investors in a post-earnings research note. The analyst keeps an Underweight rating on Tesla with a $180 price target.”
Shelby Seyrafi of FBN Securities “reiterated a Buy rating on Tesla Motors (NASDAQ: TSLA), with a price target of $275.”
Seyrafi is a 3-star analyst with an average return of 0.5% and a 51.5% success rate. Seyrafi covers the Technology sector, focusing on stocks such as Hewlett Packard Enterprise, Dot Hill Systems Corp., and Concur Technologies.
Colin Langan of UBS, says “Tesla, SolarCity synergies still cloudy.”
“Colin noted Tesla announced details of its agreement to acquire SolarCity (SCTY) and provided synergy targets with the deal. UBS said they remain cautious on the deal given the lack of compelling synergies and the fact the deal is an unneeded distraction for Tesla management, which already faces challenges with its Model 3 launch and production targets. UBS maintained its Sell rating and $160 price target on Tesla shares.”
The overall consensus of analysts covering Tesl Motors, reported at tipranks.com, is neutral (hold).
Source: TipRanks
Trade Analysis
Quarterly Reports are usually the catalyst that start or stop actions for swing traders. The Q2 report was no different. I called for a bullish swing trade when the MACD crossed to the bulls on July 1st. The trade closed on August 4th when the MACD crossed to the bears, the day after the Q2 report was released. This was a good trade that gained over $14 in about a month period to traders that went long on the stock (see the shaded band in the chart below). For option traders this was a “fabulous” trade.
A week after the report the market is undecided on what to do with TSLA in the short term. All indicators are “neutral”: the stock has gone sideways for a week; the MACD averages are flat and overlapping; the MACD itself is at zero; both the 50-day moving average (the red line in the chart below) and the 200-day moving average (the yellow line in the chart below) are flat. All of these indicators are showing the absence of a trend. Trading in these conditions is not advisable and fairly risky. I’m personally out of trading TSLA until a trend appears.
Source: Wall Street I/O
Elon Musk
Elon Musk just upped his Tesla stake further fueling SpaceX merger conversation
Elon Musk just collected a $116 billion Tesla payday and the timing is eye-opening
Elon Musk quietly collected one of the largest single-transaction paydays in corporate history on Monday. A Form 4 filed with the SEC on June 17, 2026 disclosed that Musk exercised 303,960,630 Tesla stock options from his 2018 compensation package, with the transaction dated June 16. No shares were sold on the open market.
The numbers are straightforward but striking. Musk exercised the options at a split-adjusted strike price of $23.34, with Tesla closing at $404.66 that day, putting the spread at $381.32 per share and generating roughly $115.9 billion in paper gains in a single transaction. To cover the exercise cost, Tesla withheld 17,531,857 shares through a net share settlement, meaning Musk paid nothing out of pocket.
For perspective, in 2018, Elon Musk’s award was originally approved by Tesla shareholders on March 21, 2018, and structured entirely around performance milestones that many analysts at the time called unreachable. Every tranche eventually vested. The original grant covered 20,264,042 shares at $350.02, which after Tesla’s 5-for-1 split in 2020 and 3-for-1 split in 2022 adjusted to 303,960,630 shares at $23.34. A Delaware court rescinded the award in January 2024, ruling the board was conflicted. As Teslarati reported, Tesla shareholders voted to ratify the package anyway in June 2024 by a wide margin. The Delaware Supreme Court reversed the decision in December 2025, finding full cancellation too extreme, and Tesla’s board signed an Implementation Agreement on April 21, 2026 to formally deliver the shares.
The Tesla and SpaceX merger everyone is talking about is quietly building
The timing and structure of the Form 4 filing carries more weight than a routine stock option exercise typically would. Musk exercised his 2018 Tesla award on June 16, a week into SpaceX completing its IPO and trading publicly, and giving SpaceX a public market valuation and share currency for the first time in the company’s history. A stock-for-stock merger between two companies requires the acquiring entity to have tradeable shares it can offer to the target’s shareholders, and SpaceX now has exactly that. At the same time, Musk just increased his direct Tesla voting power to approximately 20%, giving him greater influence over any shareholder vote that a merger would require. The restricted shares he received cannot be sold until 2033, which removes any near-term incentive to cash out and instead positions this stake as long-term structural collateral in a deal. Additionally, Musk’s two companies are already deeply intertwined through shared semiconductor fabrication at their joint TERAFAB facility in Austin, cross-company supply chain transactions, and Tesla’s $2 billion investment in xAI prior to the SpaceX-xAI merger.
Wedbush analyst Dan Ives has publicly placed the odds of a Tesla and SpaceX combination at 80% to 90% by early 2027. The Implementation Agreement that made Monday’s exercise possible was signed on April 21, 2026, roughly two months before the SpaceX IPO closed. That sequencing, building Musk’s Tesla ownership to its highest point ever immediately before SpaceX gains the public currency needed to acquire it, is either an extraordinary coincidence or a carefully staged foundation for the largest corporate merger in history.
Tesla deliveries got a big boost in expectations from Wall Street firm Goldman Sachs, who believes the company will report some stronger-than-expected numbers when the second quarter comes to an end in the coming weeks.
Goldman Sachs has raised its vehicle delivery forecast for Tesla (NASDAQ: TSLA) in the second quarter of 2026, signaling growing confidence in the electric vehicle leader’s near-term momentum despite mixed market signals. Analyst Mark Delaney lifted the bank’s Q2 estimate to 420,000 units from a previous 405,000, surpassing the Visible Alpha consensus estimate of 400,000.
The upward revision stems from stronger-than-expected sales data across key regions. Europe stands out with projected year-over-year growth of 85-90 percent, driven by robust demand for Tesla’s Model Y and refreshed offerings. China posted high single-digit gains, while markets like South Korea and Australia also contributed positive momentum. These gains help offset mid-teens declines in U.S. deliveries through May, where broader EV market headwinds and competition persist.
Goldman extended its optimism to the full year, increasing its 2026 delivery projection to 1.73 million vehicles from 1.72 million. Longer-term forecasts remain unchanged, with 1.88 million units expected in 2027 and 1.96 million in 2028. The bank also nudged its 2026 earnings-per-share estimate higher to $1.35 from $1.30, reflecting anticipated margin benefits from higher volumes and operational efficiencies.
Despite these positive adjustments, Goldman maintained its Neutral rating and $375 price target on Tesla shares. At current trading levels near $411, the stock sits about 8-9 percent above the target, highlighting ongoing valuation concerns even as delivery momentum builds. Tesla’s Q1 2026 deliveries totaled 358,023 units, setting a baseline for recovery expectations in the current period.
This update arrives as Tesla prepares to report official Q2 figures shortly after June 30. Investors and analysts will closely watch not only headline delivery numbers but also regional breakdowns, average selling prices, and progress on energy storage deployments and autonomous technology initiatives.
The move by Goldman Sachs underscores a broader narrative for Tesla: while legacy auto markets face softening demand and tariff uncertainties, Tesla’s global footprint and product pipeline provide resilience. Europe’s surge reflects pent-up demand and policy support for EVs, while China’s steady growth highlights Tesla’s competitive positioning against local rivals.
Tesla still has its work cut out for it, including U.S. price sensitivity and intensifying competition. Yet Goldman’s revision adds to a series of analyst notes suggesting Q2 could mark a turning point. As Tesla pushes toward higher production rates at facilities in Fremont, Shanghai, and Berlin, sustained execution will be key to validating these higher forecasts.
We have said numerous times that deliveries are becoming a less important metric in the grand scheme of things, as AI truly takes precedence in the company’s thesis.
For Tesla bulls, the Goldman note reinforces faith in underlying demand trends. For skeptics, the unchanged rating serves as a reminder that delivery beats alone may not immediately resolve valuation debates in a high-interest-rate environment. Tesla’s stock reaction will likely hinge on the official numbers and management commentary in the coming weeks.
Renowned investor Ron Baron, founder and CEO of Baron Capital, has once again demonstrated his unwavering faith in Elon Musk’s ventures.
Just after SpaceX’s record-breaking IPO, Baron announced he purchased an additional $1 billion in SpaceX (NASDAQ: SPCX) shares. This move pushes Baron Capital’s total holdings in the company to a staggering $25 billion in market value, underscoring one of the most successful private-to-public investment stories in recent history.
Baron’s relationship with SpaceX dates back to 2017, when his firm began investing approximately $1.75–2 billion through secondary markets and employee tender offers at valuations around $20–22 billion.
By the time of the IPO, which valued SpaceX at over $2 trillion with shares closing near $161, those early stakes had generated more than $13 billion in unrealized gains. Post-IPO, Baron’s position ballooned further, reflecting the company’s meteoric rise driven by reusable rocketry, Starlink’s global satellite internet constellation, Starshield defense applications, and ambitious plans for orbital infrastructure.
In a recent interview, Baron articulated his bullish outlook with characteristic enthusiasm.
Ron Baron said today that he bought $1 billion of @SpaceX IPO shares last Friday, and said that all of Baron Capital’s $SPCX holdings are now worth $25 billion.
“I think we’re going to make hundreds of billions of dollars; If you read the prospectus, you realize what they… pic.twitter.com/U8F471KtJS
— Sawyer Merritt (@SawyerMerritt) June 15, 2026
“I think we’re going to make hundreds of billions of dollars,” he stated, emphasizing that SpaceX’s achievements in rocketry and satellite technology are “not possible for anyone else to accomplish.” He envisions the company as a cornerstone of humanity’s multi-planetary future, potentially reaching valuations of $10–30 trillion within 10–15 years.
Baron has repeatedly affirmed he has no plans to sell, viewing SpaceX as a “lifetime investment” alongside Tesla.
Tesla bull Ron Baron reveals $100M SpaceX investment, sees 3-5x return on TSLA
This conviction stems from SpaceX’s unparalleled execution. The company has revolutionized access to space with Falcon 9 reusability, deployed thousands of Starlink satellites, and is advancing Starship for Mars missions and point-to-point Earth transport.
Baron highlights emerging opportunities like space-based AI data centers and direct-to-cell satellite connectivity, positioning SpaceX at the forefront of a new space economy projected to generate trillions in value.
Critics may question the lofty projections amid high valuations and execution risks, but Baron’s track record speaks volumes. His Tesla holdings, initiated in the mid-2010s, have also delivered outsized returns. As one of the largest institutional holders of SpaceX pre-IPO, Baron Capital’s funds, such as Baron Partners, benefited immensely from valuation markups.
Baron’s $1 billion IPO purchase signals deep confidence in SpaceX’s post-IPO trajectory. In an era of short-term market noise, his strategy exemplifies patient capital: backing visionary leadership and transformative technology.
For investors watching the space sector, it serves as a powerful endorsement that the final frontier may indeed yield the next great wealth-creation engine. As Baron puts it, SpaceX isn’t just building rockets—it’s trying to “save humanity” by expanding our horizons beyond Earth.
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