Diamonds and Dogs

10/24/19

Tesla (TSLA) reports a profit. The battery carmaker is up 14% after beating earnings estimates and actually making money. Tesla reporting positive free cash flow, upside to gross margins and earnings going forward as costs come under control. Tesla says self-driving car "appears to be on track" for year-end release. Tesla also reiterated their Shanghai battery Gigafactory is ahead of schedule and the Model Y car is ahead of schedule with production expected by summer 2020. Quarter end cash and cash equivalents increased to $5.3B, driven by positive free cash flow of $371 million. The drumbeat for Tesla needing more money may subside, but now valuation will become a bigger concern.

Twitter (TWTR) and 3M (MMM) dragging down the major averages. Twitter is down 18% after missing on earnings and sales. Twitter had a bug that affected its legacy Mobile Application Promotion product. The virus also affected targeted ads and its ability to share data with measurement and ad partners. The company also noted that some personalization and data settings weren't performing as per expectations. Twitter earnings are hurting several tech stocks. 3M, on the other hand, is dragging down the Dow and S&P 500 following earnings. 3M is down 4% not far from a 52-week low after slashing its profit and sales outlook. The global industrial downturn is hobbling not only 3M but other manufacturers.