Elon Musk is juggling two very different capital stories. While his tunnel-digging venture, The Boring Company, is in talks to raise roughly $4 billion at a nearly $20 billion valuation, the public face of his empire—Tesla—is watching its stock languish near 52-week lows. The juxtaposition is stark: private investors are willing to pay a hefty premium for a speculative infrastructure play, while Tesla shareholders are left to digest a profit miss, a cash burn, and a robotaxi rollout that has yet to accelerate.
The Boring Company’s fundraising round, first reported by the Wall Street Journal, would value the firm at more than triple its 2022 valuation of $5.7 billion. Known for its Vegas Loop—a subterranean transit system shuttling passengers in Tesla vehicles beneath the Las Vegas Convention Center—the company has struggled to move beyond concept stages in other cities. Projects in Baltimore, Chicago, and Los Angeles never materialized, though it is now privately funding a new Loop in Nashville and has announced plans for an underground network in Dubai. The deal is not yet final, and terms could still shift.
The timing of these negotiations coincides with a brutal stretch for Musk’s personal fortune. According to Benzinga calculations, his net worth has plunged from roughly $1.32 trillion to about $832 billion in a single month—a drop of nearly 37%, or some $500 billion. SpaceX was the primary culprit, with its shares falling 41% to 45% in the period, exacerbated by a failed Starship launch that wiped over a trillion dollars in market capitalization. Tesla contributed its share as well.
A Profit Shock and a Spending Spree
Tesla’s second-quarter results, released on July 22, delivered a clear disappointment. Revenue came in at $28.24 billion, but adjusted earnings per share of just $0.33 missed analyst consensus by 38.51%. Free cash flow swung to negative $1.09 billion as capital expenditures more than doubled sequentially to $5.79 billion. CFO Vaibhav Taneja defended the spending, telling analysts that investment outlays would continue to rise through the second half of 2026. Tesla has secured credit lines of up to $30 billion and plans to invest over $25 billion this year alone. Musk himself has described the ramp as one of the fastest industrial expansions in the U.S. since World War II.
That spending binge is not sitting well with the market. Tesla shares have fallen nearly 14% over the past seven trading sessions, now changing hands at around €278.70—just a few euros above the year’s low of €262.00 set in August. The stock is down roughly 36% from its December peak of €424.10. The relative strength index sits at 27, deep in oversold territory, signaling how aggressively the selloff has been priced in.
Short sellers have cashed in handsomely. On the day of the earnings release, when Tesla shares lost as much as 15% intraday—the worst single-session drop in over a year—shorts booked roughly $4.12 billion in paper profits. Year to date, those gains have swelled to about $8.92 billion. Tesla remains the most heavily shorted stock among the Magnificent Seven, with around 3% of its float currently shorted.
Should investors sell immediately? Or is it worth buying Tesla?
The Robotaxi Conundrum
The central question for investors is whether Tesla’s autonomous driving story can offset its deteriorating core profitability. The company has expanded its robotaxi service to Orlando and Tampa, joining Austin and Miami in operating without safety drivers. But the data tells a more cautious tale. Tesla disclosed that paid robotaxi miles grew by just 900,000 in the second quarter—exactly the same pace as the first quarter. A closer look reveals a deceleration within the period: roughly 500,000 of those miles were added in April alone, followed by just 200,000 per month in May and June.
This plateau is the critical metric. Bulls point to progress on the software side—FSD subscriptions hit a record, with over 55% of new North American deliveries now including a subscription. Production of the Cybercab, the purpose-built robotaxi vehicle, has begun, and initial public road tests started in the same quarter. Some fund managers see the selloff as an opportunity; one well-known manager increased her Tesla position after the drop. The average analyst price target of €373.67 implies roughly 34% upside from current levels, and the RSI of 29.6 suggests a technical bounce could be due.
Bears counter that the gap between spending and visible progress is widening. Operating cash flow turned negative in the quarter, and Argus Research rates the stock a “Hold,” warning that free cash flow will remain under pressure without near-term payoff for shareholders. The robotaxi expansion itself has repeatedly fallen short of Musk’s public timelines. In July, he suggested that half the U.S. population could be covered by the end of 2025, pending regulatory approvals. Yet Tesla still does not disclose fleet size, paid trip counts, intervention rates, or per-trip economics.
What Comes Next
The next quarterly update on robotaxi miles and fleet economics will be the decisive test. If paid miles break out of the 600,000-to-900,000-per-quarter range, the oversold conditions could fuel a rally toward the 50-day moving average at €347.12. If the plateau persists, the bears’ argument—massive spending without measurable returns—will likely dominate, leaving the stock vulnerable to another test of its year low at €262.00.
For now, Tesla shareholders are left watching Musk raise billions for a tunnel company while their own equity bleeds. Whether the capital-intensive bets on robotaxis, tunnels, and industrial expansion ever translate into returns for public investors remains an open question.
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