On its earnings call Wednesday, CEO Elon Musk was quick to announce that Tesla (TSLA) delivered 95,000 vehicles last quarter. The 80% increase in deliveries year-over-year was possibly the brightest moment in the second-quarter earnings call.
The electric car company posted revenue of $6.35 billion, compared to analysts’ expectations of $6.44 billion. It also saw an adjusted loss of $1.12 per share, more than analysts’ expectations of a 31-cent loss.
Tesla’s quarterly report, after a year of immense stock volatility, is the newest concern about the longevity of the company’s leader. And shares took a beating after the announcement, and are down more than 14% on Thursday to $227.
‘Not a future leader’
When asked if Tesla was worth buying after an ugly quarter, Paul Schatz, president and chief investment officer at Heritage Capital, told Yahoo Finance, “It has very idiosyncratic behavior, but no, [Musk] is not a future leader.”
“You’re going to have Mercedes and BMW and all the real car companies competing with them in the next five years, and I think they are much more well-positioned financially,” compared to Tesla.
Schatz pointed out that while Tesla may have had a head start out of the gate, the company is not taking full advantage of that position. Management is a major concern – the latest example in a series of departures is the company announcing on its earnings call that Chief Technology Officer JB Straubel was stepping down from his position and transitioning to an advisory role.
Schatz compared Musk to Microsoft founder Bill Gates – or at least suggested the Tesla leader should aspire to be like Gates in one particular way. “All great entrepreneurs eventually, like Bill Gates, all step back and say, ‘I’ve taken my company as far as I can go and need to bring in somebody that has a corporate backbone to it,’” he said. “The wrong guy is running the company.”
As for whether investors should bet on the car maker, “unless you’re a nimble trader, I think it’s lunacy to go near Tesla,” Schatz said, adding that he doesn’t see it “as a sustainable long-term business model.”
“I still think it’s going sub-$100,” Schatz said.