Correspondent Comment on Tesla New Highs

Yesterday we pointed out that Tesla is now trading at a record enterprise value of $73 billion. One of our readers pointed out how strange that is given the business results:

Last year in Q3 they had their best quarter ever. I was surprised, so were many and the stock reacted incredibly well. This year, the stock has arguably reacted even better but here is what I see as the differences:

• Q3 2018 was better than Q3 2019, on revenue and on earnings – hence y/y declines in both
• Q3 2018 was way better than Q2 2018, showing major sequential improvement – this year there was a decline in revenue from one quarter to next
• Last year in Q3 it was Tesla's first quarter with full scale Model 3 production, so there was this blue sky that could be imagined that the company had finally created a product (the Model 3) that at scale would change the trajectory of the company forever. I don’t understand what that blue sky is this year. 
• The improvements from Q2 to Q3 this year seem to have been all on the cost side since revenue actually went down, and isn’t that the opposite of blue sky? 
• The company has proven in the past that one or two good quarters are usually created by loading everything they could into them, and they are usually preceded and followed by brutal quarters (hence why their GAAP EPS since that great 2018 Q3 and including it (5 quarters), has been negative $3 a share)

So all I can think of is that it was an enormous short-covering rally. Usually seeing things like ARK selling and retail selling, would be met with a pop and fade, but not here. I have seen so many anecdotes of Twitter Tesla bears covering and moving on, so that hasn’t really happened before. I guess there could be fundamental buyers, but I just can't understand what has changed that much unless this theory applies that people are just so convinced that Elon controls earnings from here on out and will keep finding ways to make them "great."