When a company asks suppliers to return money retroactively, it's a sign that something went wrong.
This is why analysts are using Tesla Inc., which has asked suppliers to repay part of the payments they've delivered by the year 2016. Tesla asked suppliers last week for a meaningful amount of money to become profitable.
This is worrisome because Chief Executive Officer Elon Musk has. Www.moviesfilmonline.com / de / movies / … of – the – opera The success of the new Model 3 sedan is said to be the eternal loser in the economy into the black in the second half of the year and show a positive cash flow. What happens is that Tesla has wasted so much money on getting 5,000 3 models in a week – even though they have not all delivered to buyers yet – that the numbers will look rough in the second quarter and Musk has a need of The suppliers should be supported by the balance later in the year.
"It's worrying," said David Whiston, an analyst at Morningstar Inc. in Chicago, in an interview on Monday, as Tesla's shares and bonds fell. "Normally car manufacturers are playing hard with suppliers who do not go backwards, the second quarter may look ugly because they spent a ton of money to meet the production targets."
Tesla was a huge blockbuster, who sank $ 8 billion in the last four years. In the first quarter, as the company advanced to the Model 3 production line, Bloomberg's aggregated data was more than $ 1 billion.
Race at 5,000
Mounted as a pressure to ramp up Model 3 production, Musk set up a tent outside of Tesla's plant in Fremont, California. The company was having problems with its highly automated indoor assembly line and had to set up the line to boost production.
The race for the Model 3 may have resulted in unexpected costs in the second quarter. Even though Tesla makes more of the sedans, the company will not complete the delivery and earn income for many of them by the third quarter, Whiston said. While Tesla may perhaps be a pleasant surprise to investors in the second half, Musk may now require suppliers to help them secure cash flow and profits.
In the memo received from the Wall Street Journal, Tesla called the move a routine practice of working with suppliers. While it is true that automakers will demand lower prices in future model years, as both sides are costing to manufacture, the question of making money from parts made two years ago is very unusual, said Ron Harbor, Senior Partner Oliver Wyman in Detroit. 19659007] "I've never heard of it," Harbor said. "The suppliers have been asked for cuts, but for them in retrospect, it smells of desperation."
Not all agree. Ben Kallo, an analyst with Robert W. Baird & Co., who has a buy recommendation for Tesla shares, said he believes renegotiating the bidder is more likely to boost profits than a need for the balance sheet. Production is going on.
A Tesla spokesman did not return e-mails seeking a comment.
Musk said he would not have to raise cash this year, but some analysts are in doubt Whiston said Tesla not only plans to produce Model 3, but is also building new factories in China and Europe in a short time, and is launching the Sport Utility Vehicle Model, a semi-trailer, pickup and roadster Tesla carries $ 10.5 billion in debt, of which more than $ 1.7 billion is due in the next 16 months, and Tesla has $ 230 million in November even if Tesla's operations were cash flow-neutral this year and next, Tesla would only spend $ 900 million in cash pay the balance, said Joel Levington, a debt analyst at Bloomberg Intelligence.
News about the letter suppliers have sent Tesla shares and bonds. Tesla's 5.3% bonds maturing in 2025 fell 1.75 cents on Monday, the largest drop since May, according to data from the Trace bond prices. Most recently, they were listed in New York at 89.375 cents on the dollar from 11:01 clock. New York shares slipped 3.9 percent to $ 301.21 at 11:43.
Even though it's a bad sign, Tesla is in the process of getting money and Model 3 is getting Tesla's eager buyers. The company has also ordered $ 1,000 deposits for Model 3 to fund development and manufacturing, which established automakers do not need to do.
"I'm not sure it's any worse than getting money from your customers in advance," Levington said