Why almost everyone was wrong about Tesla’s cash flow situation

> hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning.

This while launching yet another compact SUV, based on the Polo platform w/o 4wd and the the base model using a three-cylinder one liter engne. Give me a break VW.

Musk plays fast and loose like he's almost asking for failure. The amount of blog posts and confused short-sellers because of this one fact have been truly entertaining/infuriating to watch.

Like when everyone thought they had won by removing him from the board of Tesla. Musk could eat Ramen in a 400sq ft apartment without a cent to his name, scheming on his next startup, and still be happy. They are fighting a strawman to death.

You can't win against this guy until you prove him wrong. Either they can't or aren't incentivized to do so, so he still wins.

I'm no expert on Tesla's economics, but on the "running close to the edge" point I would think it's not about being forced to be there, it's just the leadership trying to innovate as much as possible for each of its products -- the result of which being close to the edge is. In other words: they could have spent much less -- but why not do as much as possible if you know you'll survive. This strategy might, of course, back-fire if you fly too close to the sun but thus far it apparently hasn't. And now is payoff time I guess :)

I'd love to see Tesla succeed, but cynical part of me thinks that old stogy BigAuto is simply watching them and taking notes. Waiting for Tesla to take all the arrows and blaze the trail, and then they'll swoop in and copy once Tesla's done all the hard work for them. They're not creative enough to do a Model 3, but once the formula looks sound, they can slap together a half-assed version and flood the market with it.

I'm not convinced about the multi year advantage. Everyone else has EVs out. They are not pushing them, probably because they are reaping the profits on past ICE investments, but the next tech platforms under development for years now at VW/Mercedes/BMW are electric.

VW is planning to get to 10 million EVs by 2022. I'd give credit to Musk and Tesla for bringing forward this point by several years, but it would be silly to write that goal off as empty bluster. (After all they have been selling a well reviewed plug in electric vehicle since 2014, even if no one ever heard about it, and it was priced relatively high. Maybe so as to not interfere with ICE profits).

Responsible cash management and investor relations are not mutually exclusive with innovation. There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production.

As a consequence of this, analysts rightly discounted TSLA's stock price to account for the tremendous amount of risk he was taking by operating with little-to-no room for error. The fact that he was able to operate inside of that slim margin does not indicate that he should have.

Elon himself was so flustered by the consequences of his poor cash management (and resulting discount in the stock price) that he ended up plainly manipulating the stock price and nearly got himself banned as a D&O of a publicly-held company.

I'm tired of all of this hero-worship, and the smug "this is what it takes to change the world" discussion around his insane actions. The innovation and change brought about by the Model 3 is not a good excuse for Elon nearly killing the company to maintain his pride.

Last, the fact that raising money to ensure the financial stability of the company is seen as a pride-diminishing act by Elon is in itself worrying.

I can't be too specific but the conversations I've had with Tesla's competitors show they're terrified.

No matter what competitors say in the press, Tesla is transforming the auto industry in two fundamental ways that traditional car companies cannot adopt quickly. As easy as everyone makes electric cars and online ordering seem, Tesla's competitors are finding this challenging. The auto manufacturers must build a really great electric car and, at the same time, cut out the dealerships.

The next ten years is going to be very interesting.

> [.. tesla has .. ] 60% of world wide lithium battery capacity

This is completely untrue [1]. You are also making this claim in other comments. Lets root for Tesla, EVs and world peace, but stick to the facts.

[1] https://www.economist.com/graphic-detail/2017/08/14/the-grow...

>You can see this in how ArianneSpace and ULA are trying to get to their next generation of vehicles (which won't be competitive in terms of re-usability)

Arianespace is a company run by bureaucrats. Incredibly frustrating environment. If you ever thought space was exciting, Arianespace will suck the life out of you. Even the areas where the top management know they need deep and impactful change, they'll bring in an outsider or two to bring "a new vision", then tell the outsider to keep working with all the old people who've built their mini-empire around methods that make no sense and keep them in a perpetual state of "irreplaceable ball and chain" on the company.

If nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?

Because someone wants a nice car. You are spending a couple hours a day in your car so if it small, cramped, slow, vibrates a lot why would you subject your self to that especially if you have disposable income.

It's not about whether or not people _should_, it's just that our debt-driven society encourages it. Almost everyone these days seems to get a loan so that they can buy a vehicle they don't have the money for. This is one socially acceptable way to burn a huge chunk of your money.

I'm not a fan of electric cars, but I could see myself putting down such a sum of money for an old Mustang if I had the spending money. For people who spend such a sum of money, it's less about having a transport and it's more about hobbying with it.

I am equally baffled by people's love of throwing money at cars. When I needed a "new" car two years ago, I asked my mechanic what sort of car they would want from a reliability/value standpoint. I was told Subarus or Toyotas not later than about 2007 were very nice. I spent 3 months watching used listings and wound up with a very low mileage 2006 Rav4 (for ~$10k) and it has been wonderful.

"Want" vs "Need" problem mostly.

There might be comfort features in a more expensive car someone wants, also, new cars come with warranties. Or even certified used tend to be more recent cars with warranties. Car repair can be one of the more expensive unexpected expenses. Not to mention depending on your commute and job detrimental to your life.

Do you live in an expensive area? Seems likes spending most of your income on food and rent at that income level is high.

For the same reason people spend $1200 on a new phone to replace the $800 phone they bought a year ago.

"Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high."

If someone makes $250,000+ a year, it's not unreasonable.

"My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's less than $100 a month in ammortized costs."

That's completely unrealistic. You have some sort of competitive advantage (REALLY know someone trustworthy), or you are delusional. $3000 cars are generally very high mileage, unreliable, in poor condition, etc. Timing belts, suspension components, drive belts, starters, ac compressors, minor electronics, etc tend to start going on these cars.

"Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle? I'm not far from that number and most of my money still goes to food and rent."

I believe a car should be 3 months income at most. So no, I can't justify anything past a $10,000 car.

What I can say for sure is that unless you are a decent mechanic with tools or have GOOD friends / relatives that are, you shouldn't walk around espousing 3k cars. They just cost way too much in time.

Why buy a MacBook Pro for $2k+ when you can get by with a ChromeBook for $150?

Outward appearance, vanity, they actually have the free cash, ignorance. There's a bunch of reasons people buy expensive cars... most of which don't make sense other than that's what they choose to spend their money on vs. whatever you've chosen to spend your money on.

It's also an entirely incomplete picture on their financial situation. Maybe they have a paid for living situation so this is their only liability, maybe they don't have any money in their savings account, maybe they don't have a retirement account.

And with Tesla it's probably even more complicated because there are some "feel good" motives to buying an electric car that may outweigh any sane financial decision.

I spent more than that on a car stereo. It's all relative and what you would consider "value", your financial health, and priorities.

Some don't look at the sticker cost as how much it will cost to them, but the cost of a few years of financing it (on good rates) + the money they lose to depreciation before they trade it in for a new car.

Two incomes of 100k+/year - outside of CA, NYC, DC - you can buy two 35k cars, save for retirement, afford a mortgage, and have plenty left over.

Well, somebody has to buy new cars or there wouldn't be used cars. If most of your money is going to food and rent you must live in a very expensive location.

The short answers are: cars can be resold, so you're only paying for interest, taxes, depreciation, maintenance, repairs, insurance, and gas.

After working with vehicle data for 6 years, I can guarantee that someone who buys a 1-year-old Prius is actually paying less per month than you are for your 2005 Focus.

People who buy brand new cars are obviously paying a huge "drive it off the lot" tax in the form of depreciation, but they know that and think it's worth it. Some people are afraid to buy used, some like to drive a new car.

It's just another example of "it's expensive to be poor". If you can buy a better car, you end up paying less over the course of your owning it.

Of course, that idea breaks down if you buy something unreliable AND expensive. It also becomes fuzzier with luxury cars, since they're expensive to repair.

But a used, super-reliable car that holds value well, like a Prius or a Camry, is generally going to have the lowest total cost of ownership out of the whole spectrum of car options.

The most I'll spend is at the low end of that range. I've driven fancy German cars and understand the attraction but not enough to shell out the money.

I like getting a vehicle with the features I want and the room to haul all my various sports gear. I've bought used vehicles but, generally speaking, I like being able to buy a car with the features I want and basically not having to materially think about maintenance for a very long time. I can't say that I've found the used cars I have purchased to be particular deals in the long run. Car maintenance is one thing I'm willing to pay just not to deal with as much as possible.

I do think a lot of people spend more on cars than they can/should. I could spend less myself but on an annual basis I'm pretty frugal and haven't had a car payment for many years.

Sounds like you're a fiscally responsible person. Keep in mind most people are not, and our economy is built on top of easy credit / debt.

A lot of new cars these days start out at $20-25k. I imagine a lot of people are interested in the $35k Model 3 because it will have lower ownership costs than a gasoline car, is more fun to drive, and is neat. When you take that into account, the difference between a $25k gasoline sedan and $35k Model 3 is not THAT big.

I used to do the whole used car thing, but at this point in my life I spend more to feel safer and to be more comfortable. I still have never spent more than $25k on a car, but I definitely want to drive something that I am confident will not break down.

There are as many reasons as there are people, I don't know if you could really generalize an answer. I spent $40K on my current car because I'm an enthusiast and it puts a smile on my face every time I drive it that a 15 year old Focus definitely would not. To each their own. And in the grand scheme of things, the monthly payment (on a 1.9% loan) is about 3% of my income. As long as I meet my goals for savings, I don't really feel guilty about spending some money on stuff I enjoy.

Yeah I'm too frugal to spend like that on a car. At some point I'll buy a used Model 3...once it costs 30% of that.

For now I love my 40mpg and low maintenance and insurance costs of a 10 year old hybrid Civic.

But you have to think about all the people who buy cars for other reasons...supposed signaling, the impression it gives others, devout brand loyalty, good old consumerism... There's just so many reasons that are "misguided" from a financial perspective, but logical from the personal perspective.

It is true that at the moment a conventional (non-electric) vehicle is cheaper. However some people do want to own a car that has a lower negative impact on the environment and are willing to pay more money for that (which is a good thing).

I recently bought a new car that was less than that, but still in the $20s.

I had previously been driving old cars, which was OK, but I had never bought a new car before, so it was nice from that perspective.

It also had some features that I wanted and do appreciate. Like Bluetooth, USB audio storage, and various safety features. Excellent fuel economy too.

I plan on keeping it 15 years and/or 200K miles, or more, so the amortized cost isn't bad. Given my age, it is likely the only and last new car I'll ever purchase, because I'm sure the driving landscape will be substantially different than it is today.

I'm guessing you're not married?

It's a good question. Three things:

1) Your TCO (Total Cost of Ownership) for a cheap used car can't be $100/month. If you look at Kelley Blue Book or similar websites, they'll tell you that even super cheap cars like that 2005 Ford Focus will still cost you $300-400/month, all included.

2) I almost died in a car accident two years ago, and a result, I value car security way more than before, which means I wouldn't mind paying $35,000 for a very safe car (assuming I'll be able to afford it).

3) Salaries and wealth are not evenly distributed. Something that looks expensive to you, doesn't for someone else.

Some people like cars. If that's their thing, then cool. I dislike driving and everything having to do with it, so I have typically go your route within reason. Buy a used brand that is known for reliability.

There are both sociological and economic reasons for it. On the sociological - new cars can be a status symbol - especially in the Luxury markets. Interestingly enough - the European luxury car market is roughly twice that of the United States, despite per-capita earnings being lower then the United States. Are you German and driving a beat up Honda Civic? Not a good look. Tesla is benefiting from this - the cars are highly viral, and aligned with affluence, political persuasions, environmental outlook, sports car enthusiasm, etc. It's turning Americans more willing to buy a luxury car, if it's a Tesla. Then social network comes into effect. If one of your friends buys a Tesla, you are very very likely to as well. This is basically the only marketing program that Tesla Does (Referral codes from friends).

(BTW, I say all of this as someone who finally pulled a trigger on a "Lemur" Model 3 earlier this week).

There is also the practical - when you buy a used car between 3k and 6k, you are basically on the long tail maintenance wise. It's a good bet that the reliability of the car, and the efficiency of the car are both dramatically less then then a new car. I also enjoy snappy acceleration and a car with a low center of gravity. You get into a Model 3, and Internal Combustion Cars just feel like a horrible piece of legacy technology. Could I get away with a old Ford Fiesta or a beat up Civic? Yep - and this is replacing a 15 year old Honda CRV... but I bought that Honda CR-V new, and I have gotten every bit of value from it - and I'm passing it on to family.

Most people are not financially responsible.

(Not limited to cars; see the fact that even well earning individuals in the UK, US, etc, could only weather a few months without work because they scale up lifestyle to match).

That, and that many people actually have money. London alone has over 400,000 millionaires by NW, one years' interest on that pays for a Tesla.

People value different things differently.

> Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle?

Look around; do you see said cars? There you go.

Why would you buy modern PC, if you can buy used Pentium 4 with 2GB RAM and setup some swap for probably $50 or something like that? Some people like fast shiny things and have money to pay for it.

My prior car was new and I later decided that the added expense of a new car did not justify it. My plan was to get a few-years old "A to B" used car (like a Corolla or something) when it started needing work.

But I did change my mind and get a Model 3.

* Autopilot is quite nice. I'd compare the experience to driving a car with cruise control as compared to one that doesn't have it. It's not the end of the world, but if you have a car with cruise control, it's tough to imagine intentionally buying your next one without it barring financial difficulties.

* Not having to fill up at gas stations is nice. There's a little more planning involved for trips, but for normal day-to-day, it's waking up every day to a full tank.

* Upcoming software updates. The initial Model 3s didn't have summon or the dashcam feature, both of which have been added over the air, and more of which will be added sooner.

* I think the auto industry in general has become stagnant and "safe" in terms of innovation, and I want to support a disruptive entity that will force the others to re-think the ways they're doing business.

* It's got an API, which already has third party tools for an Apple Watch app, detailed analytics, etc.

* They're taking a risk with the interior of the car, with the lack of gauge cluster and spartan design. To me this looks like what happened when the software industry switched from "as many UI buttons and features as possible" in the '90s to the simplified, "overall user experience" focus we see in modern software. And I want to support that.

* There's some "feel-good" factor to damaging the environment less, and supporting the market that will allow for society to join in.

I agree with you in that I can't imagine spending $63k on a non-Tesla. The differences between a basic used car and a new Mercedes or something just don't justify it. But I do feel differently about the Tesla.

1. A lot of new cars are leased (30% of new car volume)

2. A lot of new cars are purchased with auto loans (44% of Americans are paying an auto loan)

3. The average new car loan amount is going up by a lot (reocrd high of $31,000 now)

4. A lot of people are defaulting (5.8% are > 60 days late, higher than the financial crisis years)

PDF warning https://static.ed.edmunds-media.com/unversioned/img/industry...

Consumers Skip More High-Rate Auto Payments Than During Crisis

https://www.bloomberg.com/news/articles/2018-05-14/consumers...

So to answer your question seriously, people take out auto loans and lease expensive cars because they like buying expensive things, even if they can't really afford it.

Well, a couple of weeks back, I bought a car. I would have bought if 35K Model 3, if one was available. Why? Because I didn't want to burn gas when there might be other options available; because I wanted to do my part in keeping an electric vehicle company alive; because I wanted to be less of an asshole to the future generations that have to live with the consequences of things we do now.

Yes, I know most of electricity is still generated from fossil fuel sources. But baby steps.

Btw, I ended buying a Honda Insight.

I am not a car fanatic like these people, but I think I get it. Some people just love cars, like how some people love gaming rigs or skiing. They love the things so much they’re willing to go into debt.

Part of the phenomenon may be branding too. Cars are used as a status symbol. It’s not necessarily used to broadcast that you’re a “better” person than others, but maybe that you have “good taste” and “can afford it” (think something like expensive designer handbags but more functional).

And some people are just dopes who spend money or go into debt with thinking about it. They’re financially illiterate. These are people who make emotional purchases and feel very excited and happy about their new car, who gripe about their debt two months later when reality sinks in. I feel bad for them.

To me the sweet spot is a $8k car (Toyota Corolla) with 6 years of usage and keep it for at least 4 more years.

If you buy a new car and resell it after 3 years, you can end up spending the same amount as you would do with a used car. You always run the risk of a bad accident ruining your investment but that's also what insurances are for. With a used car you run a higher risk of having unforeseen failures much earlier than you would want.

All in all I am still buying second hand cars but the investment into new cars is not what it seems at first.

Really not sure (I've always driven 'bangers' that are at least 11 years old) - but shocks me to see friends buying new cars.

That said a number seem to be:

* Company cars * Bought as part of 'own company' * Leased * Hired * Hire/purchase

Then a lower number: * Bought with autofinance * Bought with a bank loan * Bought on a CC

Very few (if any) are bought in cash. I remember my father (who has never been a rich man) buying his car in cash, (£10,000 in 1996) with the plan that this would last him. It did for 13 years.

I was shocked when my brother bought a new van recently - but at less than £200 a month, it worked out less than buying a banger and having to fix it - he needed a van for his job, so can't afford to have a day or days without a working vehicle. I think that is what it comes down to for most people who do buy new. 'Perception' of vehicle less likely to breakdown.

It’s relative to whatever else you want to spend your money on. I spent $90k on my recent car because I love cars, and this was a relative deal (it was worth $110k) with decent resale value.

I have friends that have spent $140k on their Tesla model X, or $190k on their Porsche 911 Turbo. That seems too high for me. Shrug. Everyone is different in their priorities. Most of these are leases where they’re paying maybe $5k a month. When you make $300-400k a year or more with current low rates it’s not terrible.

Because they can, and because they want to. If a $50,000 car is 200X your income, that's one thing...if it/s 1/20 your income, it makes the [emotional] decision much easier to rationalize.

Further, that $50k is being more and more hidden in things like low-mileage leases, so it doesn't FEEL like that...it only feels like $400 a month and you get a new car in 3 years...but nothing to show for it after the fact.

I wouldn't spend that kind of money unless I had fuck you money in the bank, knowing full well they depreciate half their value after the first year (although as an aside: I don't know if that's the case with Tesla cars, less moving complicated parts so less wear and tear. Apple computers and phones depreciate notably less quickly than their competitors, too).

However, I work for a company that offers a lease budget, meaning I am actually able to drive a $35K car at a small bump in taxes (that is, a percentage of the value of the car is added to my annual income and taxed as income tax accordingly. I get free fuel from work though otoh so it's a good deal).

Especially in Europe and / or my segment of work, lease cars are a huge market - tens of thousands of cars - and Tesla will make a HUGE impact on that once they become available over here. Europe and my country are much more suitable for electric cars too, in that distances are generally much lower.

>> A used car from a fairly reputable source can be had...

EVERY used car was once a new car. How many times do you think a car gets sold? Perhaps 3 or 4 including the original new sale? If so then 25 percent of car sales are new car sales. Another thing to consider is the resale price of a car. With an old used car you may think you'll drive it until it's used up and junk it, while the previous owners kept it until it was "used up" in the sense that they sell it and get some money for it.

Sure new cars are generally over prices, but TCO is still an important consideration.

We bought a Model 3 last week because we wanted to support a car company that was all-in on EVs and sustainable technology. We feel climate change will be the defining event of our generation and we want to support technologies and companies that seek to reduce our carbon footprint and combat climate change.

Most auto companies like GM and Ford are producing EVs to meet regulations that they're actively trying to get rid of. Others like VW are only doing it as part of legal settlements. Supporting them financially would be potentially to our benefit and not the planet as given the opportunity they'd dump EVs and go right back to the ICE. The remainder aren't investing in technology, they're just licensing it from the big 3.

We needed a larger sedan and considered hybrids like the Accord or Camry but older models only have efficiencies comparable to small sedans like the Corolla where as the 2019 models see much higher gains. Additionally the hybrid models are a premium approaching the $40k range.

With the full Federal Tax credit, the Model 3 we bought will cost around $44,000. This is the first new car either of us has bought and while it's a non trivial cost, it's something we can easily afford.

I've found uber and potentially renting a car is more cost efficient to owning a car and paying parking. I drive so little my car was collecting dust. I still have insurance to drive but that is half of what it used to be. Plus I hate driving in congested traffic.

I used to be a used car person, then after I got my first new car I became a new car person. When I get a new car, it is still a new car to me even after 10 - 15 years. My previous new vehicle cost just over 20K, and lasted about 15 years.

When I bought used cars, in the 2-5K range, they would last about 3 years before I felt I needed to trade them in, and I'd be constantly working on them. A new car gives me a break for about 8 years or more before I really have to work on them (other than regular maintenance). And that is really nice knowing that I can get in the car in the morning, and have a really high rate of confidence that I'll get to work and get home.

The other thing, having a car from day 1 means that I know how it was maintained. The biggest item is having it garage kept, keeps the morning dew off it and therefore have fewer problems with internal components (and rusting) over time.

Why would anyone rent a downtown apartment with heating, air-conditioning and a Jacuzzi? Might as well live in the jungle.

The answer is simple. People are different. Some prioritize travel. Some prioritize Home-ownership; and some require a nice car.

You are neither a genius nor frugal. Different people will have different priorities.

I paid $5000 for a 2001 GMC 2500 with a lift gate and 56k miles. There are some dents and surface rust, but the truck is generally solid. Crank windows and only one working speaker. I call it my luxury vehicle because I have the luxury of not worrying about it.

I will be supplementing this with a 10+ year old hatchback for better gas mileage and less wear on the truck. I'm expecting to pay around $5k for that too.

I've always wondered this, too. The most expensive car I ever bought cost $14K. It was really nice while I had it, but the loan and insurance payments added up to more than $500/month. With a car old enough I can pay for it outright, insurance only costs about $90/month, and even budgeting for $1000-$2000 in repair work every year I'm coming out significantly ahead.

Buying a new car seems like such an unreasonably expensive luxury that I am genuinely surprised there are enough people wealthy enough to keep the industry going.

Most people aren't trying to minimize their transportation costs though, in the same way that people aren't trying to minimize their housing costs when buying a house. People get the nicest car, and biggest house, that they can afford. If you have a long commute, I think it makes sense to get a pretty nice car, considering how much time you spend in it, and how annoying it is to have your car break down or need repairs at random times.

it seems that people who buy cars fall into two groups.

the first group views a car as an appliance, and will generally buy the cheapest one that will get them where they need to go and haul their stuff around. you tend to see these people driving crossovers.

the second group actually enjoys driving, and will seek to get the nicest car that fits in their budget. the minimum viable car and the nicest car you can afford can be very different in cost.

Agreed, the article is a very basic and imprecise overview of Tesla's finances, it brings no new insight. The more informed shortsellers and investors go to much more depth. The headline is quite... bold, given that the author doesn't know much about Tesla's finances and corporate finance in general.

By the way, last quarter was a big surprise to everyone, bulls and bears.

I agree Earning and cash flow can be manipulated. To improve cash flow just don't pay your vendors for a quarter. To improve earning you can shift they delivery time from 1q to another. It did look AP went up for Tesla by about 500mil so did AR which is kind of strange, but their Quarter still looked great.

Churn should be a strong indicator of managerial issues. But I think it’s not because of how much wealth companies and certain people amassed.

I had the same feeling. Could use an accountant chiming in here.

On the one hand the third quarter update clearly states 'Unaudited' above the statement of operations and balance sheet. On the other hand, they present GAAP-figures. As far as my practical knowledge of working with accountants go, they would frown quite heavily upon using 'new and improved' accounting methods for their Q3-update. Even for 'unaudited' GAAP-figures 'we' (investors) should be able to expect a continuous accounting practices from the firm. But it's good practice to read any statement of an accountant dilligently (ever read an ISAE-statement?) and read non-audited statement with even more caution.

Remember their "Secret Master Plan?" This was published 12 years ago:

>In keeping with a fast growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.

https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...

> They never had a cash problem

They absolutely did. Tesla was a bet on production. They bet the company over the past few months.

They weren’t an Amazon “if we dial it back a bit we can be profitable” case. They were a “if we don’t make enough cars we may not pay our debts” case. They made enough cars. That doesn’t mean the concerns ex ante were unmerited.

Author here. What do you mean by "short?" The piece is 1,500 words, which is about double the length of a typical newspaper column.

I'm not going to get into the exact economics, but Ars writers write about a piece a day, and the average piece gets tens of thousands of visitors. Revenue per article (for most mainstream news site, not just Ars) is significantly better than $0.001 per visitor. High-end advertisers are willing to pay a premium to put their ads next to high-quality content and to know the demographics of the people seeing their ads. None of us is getting rich doing this though!

We're also fortunate to have a significant base of paying subscribers, which makes it easier for us to write in-depth pieces that might not generate enough revenue from ads alone.

Under current rules, I'm pretty sure it is legal to try and destroy a company by destroying its reputation and maligning its financials and profit by shorting it while you kill it.

That this is allowed seems anti-competitive and takes away from the notion that shorts "make a market healthier by bringing balance."

There is no doubt that there were players in the markets that were doing their best to actively destroy Tesla for personal profit reasons.

But then there were a lot of people - even Tesla fans - who knew the numbers and still worried.

I think it's still a little soon to call them wrong. I was long TSLA for quite awhile, and have never been short. TSLA still has financial issues. While this quarter was certainly a positive, it remains to be seen if they can keep it going [1].

When it comes to financial investment I try not to be 'anti' anything. I look at what is. The facts still show TSLA having a bumpy road ahead. The next two quarters will really show if things have turned. First we'll find out if this beat was just a timing beat with cash flow and accounts payable. Next, we'll see how the debt payments coming due are covered.

[1] I see a lot of 3's on the road, so I'm starting to lean back towards probably.

The victim complex with this company and the Musk fans is ridiculous.

The company was a financial dumpster fire losing exectives at an alarming rate (they had their Chief Accounting Officer leave after 29 days this quarter). It's just less of a financial dumpster fire now. Their payables increased by more than their earnings and are still more than their cash.

Would you consider yourself financially healthy if you had $3000 between your savings and checking accounts but a $3500 credit card bill (that has been growing QoQ)?

I haven't checked lately how many liens were filed against them but last count I noted was 18 filed this year - vendors aren't getting paid anywhere near terms, this isn't just managing cash - there are still a lot of red flags even if you think (and I would agree with this) the situation seems to be improving.

The last financial crisis led to the rich getting richer. They'll always have money for Teslas.

What are you talking about? Tesla was founded in 2003, and did in fact have to stomach the major economic downturn in 2008. Was not a great time to be a car company, especially a small start up.

In that vein, I'm looking for contributors to my financial media literacy guide:

https://github.com/nemild/hack-the-media/blob/master/financi...

It's a new version of my broader software eng media literacy guide:

https://github.com/nemild/hack-the-media/blob/master/softwar...

Tesla books revenue when they deliver cars to buyers, not when they ship them.