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That was it.
TSLA up 12% after-markets, with not so perfect numbers
I'm puzzled. Short-Squeeze? Rockstar- vs. Voldemort-CEO? Or did some options-"whale" just sneezed during order execution?
With Tesla, deliveries of the Model 3 look good and the company keeps increasing production capacity so if you're a believer in Tesla, they're going in the direction you want with a new plant in China, increased capacity in California, a new model on the way, and a German plant being planned. I think Tesla's earnings beat expectations, but I don't think Tesla is about making money today. Tesla today is more about scaling up production, making cars in more parts of the world, making a new Model Y, etc. And I think along those metrics Tesla is doing quite well. They're shipping a high-volume car that customers are loving, they'll have a cross-over based on that car available soon, they're proving they can open new plants, etc. If you're a believer in Tesla, they're probably hitting the metrics you're interested in and you have realistic expectations about their current earnings which they probably exceeded.
With Facebook, it could be a number of things. Their margins are going down. 2018 had 45% margins which shrank to 34% in 2019. Earnings per share are down 15%. For the quarter, net income was up 8% YoY and margin was only down 4%, but it's not the most encouraging financial numbers. Heck, Facebook increased headcount by 26%, but their daily/monthly active user base is only up 8-9% and revenue is only up 27% so they're employing more people per user and revenue is only scaling with headcount. That's not necessarily bad, but you'd hope that they'd be able to keep margins higher and maybe grow revenue or users faster than headcount.
But it might just be that after-hours numbers don't necessarily indicate what investors will think during a full trading day.
Second of all: FB has been profitable for years and is still growing its earnings at very high percentages, while TSLA is still incurring net losses. One could actually say that they didn't beat earnings-estimates but rather loss-estimates.
Add to that: TSLA's market cap is now higher than that of Ford, GM or VW. Sometimes a multiple of it. While still not making a profit.
Thus the question: Where do after-hours traders get the confidence for a 12% rise?
Or people were expecting a huge beat, and only got a moderate beat. That's certainly happened before with facebook.
Even if Facebook is shrinking, I don't think WhatsApp and Instagram are, and who knows what other companies Facebook may be able to buy up rather than be overtaken by.
Their report indicates they just passed the 2.5 billion user mark.
What is FB buying/using so much of that it hasn't paid for yet?
Over a million dollars spent per staff member.
Wow.
Are you saying that's a lot, or not a lot?
At somewhere elite like Facebook many of those staff members are probably being paid about half of that in compensation. And then they have massive server farms to run.
The amount of software and hardware solutions that get developed over that time creates a great entry barrier. That's not to say that it's impossible for a competitor to appear with a great idea and execution and over time become the next big thing, but it's critical to emphasize that it's going to take a long time of large year over year investment to get there.
