Bear discusses 'Accounts payable'

Discussion in 'Tesla' started by bwilson4web, Nov 7, 2018.

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  1. bwilson4web

    bwilson4web Well-Known Member Subscriber

    This is the first sensible criticism:

    . . . With extra inventory coming up from the second quarter, in addition to prioritizing the highest-margin variants of its Model 3 sedan, Tesla was able to give the impression of high gross margins and a real profit. At the same time, it stretched its massive Accounts Payable bill even further, while stiffing owners on service and repairs.
    . . .

    The "extra inventory" maximized the Federal Credit to give them a sales advantage. This is not a problem as much as a sensible business decision.

    "Highest-margin ... Model 3" also makes sense as this is a common practice across any product ranging from iPhone, Macintosh, or any other. The first adopters pay the price but get a head-start with the new technology.

    The "Accounts Payable" is evident in the Q3 financial but I could not find any finer details. Are these payments to Panasonic for battery production? This is an interesting question but not one that disturbs my sleep because they were already listed in "Liabilities". The only way it would be a problem is if it was hiding operational expenses and that is not evident. A potential draw on cash, it should roll-over.

    Others don't share this point of view:

    If you are betting against Tesla today, you either have balls made of steel or a brain made of jello.

    There are still some obstacles that could give some hard times for Tesla, but I think the worst is behind them.

    Betting that they can’t handle those few obstacles after they overcame some much harder ones seems crazy to me.

    Bob Wilson
    Last edited: Nov 7, 2018
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