Elon Musk: Always A Douche

[HVC]

After a little bump from trumps car ad Tesla is sliding again. Good.

[Syt]

[Syt]

Is being on X included in the 120 hours?

[Valmy]

Elon's job is pretty much just post on social media all day.

[dist]

What a cesspool.

I really can't wait for Elon to self-medicate himself into death.

[The Minsky Moment]

The Rothmus guy has a point. As prelude to their other crimes, Hitler, Stalin, and Mao all purged their national governments of conscientious professionals and put loyalist flunkies in their place.  Just like Elon and Donald are doing now. 

[HVC]

It's behind the financial times paywall so I can't get to the actual article, but tertiary sources are relaying the accusations of $1.4 billion missing from tesla books. From what i gather the main thrust is that 6 billion of assets bought show up bought in expenses, but the assets on the balance sheet are short.

[Neil]

Does it matter?  I mean, I guess it'll be poison to investors, but there won't be any legal consequences.

[HVC]

On the securities side probably nothing will happen, since as you said his buddy trump would intervene. On the stock side, though, if more confidence is lost and the stock plunges more then then musk loses his hold over American politics. No money no power.

[The Minsky Moment]

Does it matter?  I mean, I guess it'll be poison to investors, but there won't be any legal consequences.

Trump can muzzle the SEC, but not the private securities plaintiffs' bar.

[Josquius]

Teslas  stock collapse seems to have halted.

[The Minsky Moment]

I have access to FT Alphaville - key excerpts:

Looking at last year, in the third and fourth quarter combined, Tesla spent $6.3bn on "purchases of property and equipment excluding finance leases, net of sales" according to its cashflow statements.

Over on the balance sheet, however, the gross value of property, plant and equipment rose by only $4.9bn in that period, to $51bn.

. ..

Tesla reports the gross figures and the accumulated depreciation, so we can see how the net figure is arrived at. It didn't disclose any sales or "material" asset impairments that would account for the missing $1.4bn, and we're sure auditors PWC would be alive to the important signal such declarations of mal-investment would send.

Foreign exchange seems unlikely to explain the gap either. Tesla makes cars in the US, China, and Germany, and while the euro did weaken against the dollar in the periods, four-fifths of Tesla's "long-lived assets" are in America

. . .

Such anomalies can be red flags, potentially indicative of weak internal controls. Aggressive classification of operating expenses as investment can be used to artificially boost reported profits.

Emphasis added.


Also:

Last year the group generated $15bn of operating cashflow. It invested $11bn into its businesses, and didn't pay a dividend or buy back shares with its large cash pile (putting Tesla in a very select club of large companies that do not, along with mysterious Temu owner PDD).

Yet Tesla also raised a net $3.9bn in new finance, on top of the $2.6bn raised in 2023.

A combination of excess cash flow and ongoing capital raising is another red flag that can signal accounting misstatements.

[Neil]

Does it matter?  I mean, I guess it'll be poison to investors, but there won't be any legal consequences.

Trump can muzzle the SEC, but not the private securities plaintiffs' bar.

Can't he just have anybody who tries to file suit deported to El Salvador?

[The Minsky Moment]

Comments:

The FT is cautious so buried the lead in the passive voice.  They don't have proof that Tesla misclassified Opex as Capex.  But if you follow the Holmesian method of eliminating all other possibilities, it does seem like a plausible explanation.

The writer is also suspicious about raising finance when you are generating substantial excess cash flow over investment. Looking at the detail in the notes, however, it appears that much of the increase is accounting for by a large ($2.74 billion) loan taken from Chinese lenders at an extremely low rate of 1.92% (118 basis points BELOW the Chinese prime rate).  I don't think the question here is an accounting misstatement. The question is what considerations Tesla had to provide to get such concessionary rates from unidentified "lenders in China."

[Sheilbh]

Comments:

The FT is cautious so buried the lead in the passive voice.  They don't have proof that Tesla misclassified Opex as Capex.  But if you follow the Holmesian method of eliminating all other possibilities, it does seem like a plausible explanation.

Cautious and very carefully legalled.

But I'd just note that the FT's coverage on Wirecard also started on Alphaville raising questions about some dubious accounting figures.

In that case after years of reporting there was a scandal and a collapse and criminal investigations. But the initial response by authorities in Germany involved opening criminal proceedings against the FT over their reporting (among other steps). I think a cautious step by step approach closely involving the lawyers in the newsroom is right given that experience and the rumours I've heard on the grapevine that basically every paper in London is already being sued for one form of libel or another by Musk and/or Trump.