Josh Wolfe @wolfejosh VC, entrepreneur, fund manager @Lux_Capital; Chair @CiPrep Coney Island Prep; Trustee @SfiScience Santa Fe Inst; CoFounder of Carson, Quinn & Bodhi w/ @ltwolfe Nov. 07, 2019 1 min read

1/ An invitation—
(to the genuinely open-minded intellectually honest)

Optimists believe TSLA is “cash flow positive”

Skeptics believe TSLA uses misleading accounting tricks (too hard for non-analysts to spot)—to win headlines + pump the stock.

An interesting QUIZ...

2/ (Believe it is via @WhitneyTilson + @glenntongue)...

3/ Here are TSLA’s own words + Bloombergs reporting of the financials that suggest “cash flow” +

4/ Here is a correction to the debt calculation...

5/ And an inclusion of financing leases with total net debt—
and yet despite $800M of equity raised this year—the mystery is where did ~$1B of “free cash flow” go?

6/ The explanation is (1) capital leases*
*and look at how Amazon now very clearly in contrast lays out this info...

7/ Then there is “distributions paid to non-controlling interests in subsidiaries” with confusing accounting + inclusion of cash that doesn’t belong to Tesla shareholders

8/ Here is the footnote

9/ Then going back 2 years they changed how they record resale “guarantees” + the accounting of “collateralized lease borrowings”

10/ They then conveniently stopped using this adjustment in 2018 because it LOWERS how they calculate “free cash flow”

11/ Adding all the above—the conclusion below is:
TSLA doesn’t generate “free cash flow” at all

12/ It’s just the misleading + misdirection that‘s too clever to be accidental

& if it’s intentional—the super sad shame? the mission is objectively worthy + noble (few critics TSLA disagree w/ that)

just wish the motives/accounting/accountability had integrity + honesty

You can follow @wolfejosh.


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