Why Tesla's Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electric-car manufacturer Tesla Motors (Nasdaq: TSLA  ) were zooming ahead today, gaining as much as 15% in intraday trading after the company announced first-quarter results.

So what: Rare is the quarterly earnings announcement that can miss expectations but still lead to a spike in the company's stock. But Tesla managed exactly that today. On an adjusted basis, the company lost $0.76 per share versus a $0.44 per-share loss last year and the expectation of a $0.70 loss. Revenue of $30.2 million was down 38% from the first quarter of 2011.

Now what: But Tesla's isn't a story of the per-share profit for this current quarter. Instead, it's a story of whether the company can ramp up its business, start selling loads of premium electric cars, and nurture partnerships with other carmakers that want to use its technology. And that storyline got a boost from this quarterly report.

In the quarterly shareholder letter, management said the introduction of the Model S is running ahead of schedule and the company will likely begin deliveries in June rather than July. There are 10,000 reservations for the Model S, and the company expects to deliver 5,000 by year end. Meanwhile, management also reminded shareholders of the relationships that the company is continuing to build with Toyota (NYSE: TM  ) -- which is using Tesla technology for the electric RAV4 EV -- and Daimler -- which will be using a Tesla powertrain for the Mercedes-Benz EV.

A sure thing Tesla is not, but with the future of the company riding on a successful introduction of the Model S, there's good reason for investors to be excited today about the solid progress that the company announced.

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