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Tesla reports more Doozie | Wolf Street



The trick that contributed to stocks rising 20%.

It would be a joke for a small niche automaker specialized in luxury cars with a world market share of less than 1% to achieve this kind of global attention. However, Tesla is unique for its extraordinarily ridiculous stock price. Although this price has dropped by about 32% from its peak in June 2017, it is still ridiculously high. More on this.

We'll skip all that shiny stuff and go straight to the financial statement, more specifically the earnings statement, where Tesla is a zinger with a net loss of $ 702 million, the third-worst quarterly net loss of all time. We note here that part of Tesla's business model is selling taxpayer-funded credits to other companies. However, these will not be fully disclosed until later when Tesla submits its 1

0Q system:

The stocks that contributed rose 20%.

These pollution credits are pure gain. For the first quarter, Tesla spent only $ 15 million of these loans. For full disclosure, we must wait until Tesla submits the Q1 10Q report at a later date, to which no one pays any attention.

For example, Tesla recorded a profit of $ 311 million in the third quarter of last year. On October 24, the whole world speculated and dug up how it did it. At that time, 52 million US dollars for "regulatory loans" was provided, as she calls. On November 2, Tesla then filed the 10-Q for that quarter, announcing that $ 189.5 million of the $ 311 million gain stemmed from the sale of these "regulatory credits," a much larger amount than common.

Reporting a $ 311 million profit and not fully disclosed that $ 189.5 million was regulatory credit, some of which may have been saved from previous quarters, was an artful ruse worked because their shares rose 20%. Tesla would do anything to make his shares jump because the convertible bonds are due – but that's another story that has not been shaken up.

In their annual report for 2018 (10-K, filed earlier this year), Tesla reported sales of $ 418.6 million in "regulatory loans," including $ 315.2 million for Zero Emission Vehicle (ZEV) bonds and $ 103.4 million for non-ZEV regulatory credit. Without these loans, the annual loss for 2018 would have been $ 1.4 billion.

Regarding the first quarter of 2019, we still do not know the full amount of "regulatory loans" included in first quarter results and net loss reduced loss to $ 702 million.

A praise to the revenue.

First quarter revenue of $ 4.5 billion was 37% lower than the fourth quarter of 2018, but still up 33% from the first quarter of 2018. The annual revenue growth of 33% in the automotive industry a big thing. [19659003] Mass production of Model 3 began in the first quarter of 2018, and worldwide deliveries increased from 8,182 vehicles in that quarter to 50,928 in the first quarter of 2019. So, ignore the quarterly drop in first quarter deliveries by 20%. Base on an annual basis, kudos!

Worldwide shipments of Model S and Model X dropped 45% year-on-year and 56% sequentially to just 12,091 in the first quarter. If you just look at the numbers and you do not know what wonders the company has up your sleeve, I would say that there is a small problem. Operating costs were nearly unchanged at $ 1.09 billion, up 6% from the fourth quarter, up 3% from a year earlier, perhaps thanks to cost reductions and mass reductions.

Bleeding cash .

Operating cash flow in Q1 was $ 919.5 million, more than wiping out. However, this $ 909.5 million positive cash flow in the fourth quarter was a little less catastrophic than the one Cash-drain effect of $ 1.05 billion in the first quarter of last year.

Tesla said $ 2.1 billion was available at the end of March, compared to $ 3.7 billion at the end of December, so it should be better at positive cash flow or investors are encouraged to spend more burn.

Many debts and a high credit rating .

The company has liabilities of $ 22 billion, including these three major items, totaling nearly $ 15 billion:

  • Customs Deposits: $ 768 million (year on year) [Long-termdebtandfinanceleasesincludingcurrentshare:$115billion
  • Other long-term debt: $ 2.5 billion (19659023) This amount would be above all for profitability and positive cash flow not a big problem. But it is an example of losses and cash burn, and these debts could turn out to be a problem. Moody & # 39; s rated Tesla with "B3" – six cuts in garbage and highly speculative (my cheat sheet for the rating scale of Moody's, S & P and Fitch).

    The Tesla Market Capitalization joke .

    Nevertheless, Tesla's share price has continued to drain rational minds, even after falling 32% in June 2017. The company has in the past nothing but annual losses and cash burn and "production hell" as its chaotic CEO, Elon Musk, nicknamed it that it is a standard procedure. It has a world market share of less than 1%. And today, at $ 258.66 a share, Tesla has a market capitalization of $ 44.7 billion.

    By comparison, GM – and I'm not a fan of GM at this price – reported net $ 48 billion in revenue over the past four years and its revenue of $ 147 billion in 2018 seven times as large as Tesla's, has a market capitalization of $ 56.6 billion. And at the height of Tesla's lack of attention, there were long periods when Tesla's market capitalization exceeded those of GM.

    For fun, I made this chart to show the difference in market capitalization (GM minus Tesla) in billions of dollars. When the values ​​turn negative and fall below the red line, they indicate that Tesla's market capitalization has exceeded that of GM. Positive values ​​above the red line indicate that GM's market capitalization has exceeded that of Tesla (Market Cap Data on YCharts):

    . Then it swung in the other direction. Currently, GM's market capitalization exceeds Tesla's by $ 11.5 billion. But the bad part is that they are even in the same field – a proof of how crazy this market has become.

    There are now 486 EV manufacturers in China, three times in two years. Most will disappear. Read … China EV Manufacturing Bubble Faces get bludgeonated

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