I was quietly having a coffee with a view of the Pyrenees when I noticed Tesla shares had gained almost 20% in a week.
Why the rise when the results are bad?
I wanted to understand it. Let me explain.
The financial results are out
Tesla released its quarterly results on Tuesday 22 April.
No surprise: they aren’t good...
Of course, the wider environment is difficult, with Donald Trump’s tariffs slowing plenty of businesses down.
But Tesla is also losing ground in its own industry.
Its Chinese rival BYD is doing much better on sales.
Tesla’s numbers speak for themselves:
- Profit down 70.58% year on year
- Revenue down 9.23%
- Sales targets missed by a wide margin
With that, you’d "logically" expect the stock to fall.
Instead, it rose. A lot.
I’ve discussed this before: earnings reports affect share prices, but not always in the direction you’d expect.
Nvidia, for example, beat expectations but its shares fell.
The same happened with BYD recently.
With Tesla, the paradox is even more pronounced.
A Reddit comment I saw summed it up nicely:
"If you haven’t worked it out yet, Tesla just does the opposite of what makes sense. Cybertaxi announcement? -10%. Elon posts a DOGE meme? +100%. Completely missed earnings? +20%."
Logic that’s hard to follow
A lot of traders bet on the stock falling after the poor results.
Some had shorted it or bought put options, but it went up.
It’s the kind of situation that feeds a phrase you see all over investing forums:
"The casino is rigged."
Even when your reasoning seems sound, the market can go the other way.
Why?
Because the stock market doesn’t always follow rational rules.
And Tesla stock has become highly speculative.
Many people approach it as a bet.
Some buying and selling behaviour has very little rational basis.
I have several investor friends who won’t touch it for that reason.
Then add the Musk factor.
Some people can’t stand him. Others trust him no matter what he says.
Often, the loudest voices are his critics.
But his influence remains strong.
Sometimes his announcements alone can push the stock higher, even when the numbers are bad.
Two announcements that mattered
Before and after the earnings release, Elon Musk made two important announcements.
First, he said the government’s DOGE project would now be run without his direct involvement.
Then he announced the launch of the first fully autonomous taxis in Austin this summer.
For some investors, those are reassuring signals: fewer distractions, more concrete progress.
Even with poor figures, the market looks ahead, and these announcements give the company a new story.
Of course, you can still think the casino is "rigged", given the support he gets from Donald Trump.
But at our level, we don’t control the outcome.