Tesla Inc. TSLA shares rose 3.23% on Thursday after the electric vehicle maker reported its best-ever quarterly profit.
The stock closed up $31.58, or 3.2%, at $1,008.78 per share. Shares traded as high as $1,092.22 at the start of the session, gaining almost 12% before retreating alongside the broader market.
Tesla late Wednesday reported a record profit of $3.3 billion for the first three months of the year, signaling that vehicle production will continue to grow despite shutdowns in China. Chief Executive Elon Musk said the company is expected to produce more than 1.5 million vehicles in 2022, up 60% year-on-year.
The results indicated progress in Tesla’s business, but also challenges arising from the global economy’s stop-start ascent from the Covid-19 lockdowns and the supply chain failures that have accompanied the unusual recovery.
Tesla delivered about 310,000 vehicles worldwide in the first quarter, up from 184,877 a year earlier. However, Mr Musk said rising input costs caused difficulties after prices for commodities from lithium to nickel rose. “I think the official figures actually underestimate the true extent of inflation,” he said.
Wedbush Securities analyst Daniel Ives said investors were relieved by Mr Musk’s upbeat comments on Shanghai production. Production at Tesla’s Shanghai factory halted in late March after the city imposed shutdowns to stem the spread of the coronavirus.
Tesla stock has long been fueled by a passion for the company and its CEO, who has garnered a loyal following on Twitter.
The stock rose as a slump in interest rates pushed investors into more speculative corners of the financial markets during the pandemic. The gains confused some investors, who said they were unbalanced by Tesla’s performance as a company, and in some ways made Mr Musk the richest man on earth.
The stock received another boost when it was included in the S&P 500 in December 2020, prompting money managers who track the index to buy Tesla shares. Tesla hit its highest closing price of $1,229.91 in early November 2021. Shortly thereafter, shares fell as Twitter users voted in favor of Mr. Musk selling part of his stake in the company.
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Tesla has since declined but has held up better than many of the other stocks investors have crammed into during the Covid-19 shutdown. The stock price is down 4.5% so far in 2022, bettering the S&P 500’s 7.8% drop.
Mr Musk has once again used Twitter to unusual effect in recent days, sending cryptic tweets hinting at the prospect of a takeover bid to buy the social media company. Twitter is expected to reject its existing $43 billion offer, which came after Mr Musk built a large stake in the company and criticized its moderation policy.
As Elon Musk attempts to buy Twitter, the WSJ looks back at Twitter’s former suitors like Salesforce, Disney, and Alphabet. Tech reporter Tim Higgins explains why those past talks failed and what’s different this time. Figure: Nikki Walker
Write to Joe Wallace at [email protected]
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Appeared in the April 22, 2022 print edition as “Tesla Stock Climbs on Record Earnings.”