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Biggest realization to come out of $TSLA $TSLAQ 10-Q report for me: the company is still incredibly short on cash, despite cap raise and reported $5bn unrestricted cash balance at Q end.
(thread)
1/
(thread)
1/
Evidence 1)
interest earned in the Q. this would suggest $1.7-1.8bn cash balance at 2.2/2.3% rates - despite $TSLA raising $2.4bn net cash via bond, stock deals in mid May
Implication is intra-Q cash MUCH lower given $ raised earns $7mm in 6 weeks post offering during Q
2/
interest earned in the Q. this would suggest $1.7-1.8bn cash balance at 2.2/2.3% rates - despite $TSLA raising $2.4bn net cash via bond, stock deals in mid May
Implication is intra-Q cash MUCH lower given $ raised earns $7mm in 6 weeks post offering during Q
2/
Evidence 2)
cash in MM funds. this is reported quarterly (p19 in the current Q) and was $1.7bn - thus, consistent w/ evidence 1)
Key point tho is % of reported cash held in MM funds was just 30%...the lowest ratio of MM funds to reported cash balance since Dec15
3/
cash in MM funds. this is reported quarterly (p19 in the current Q) and was $1.7bn - thus, consistent w/ evidence 1)
Key point tho is % of reported cash held in MM funds was just 30%...the lowest ratio of MM funds to reported cash balance since Dec15
3/
Evidence 3)
changes in gross cash and debt (from the CF statement, p9). there were no maturing bonds in the Q but $TSLA reported total debt repayments of $1.7bn (removing 1Q figs)....what could this be?
implication is $TSLA was drawing down the CA significantly intra-Q
4/
changes in gross cash and debt (from the CF statement, p9). there were no maturing bonds in the Q but $TSLA reported total debt repayments of $1.7bn (removing 1Q figs)....what could this be?
implication is $TSLA was drawing down the CA significantly intra-Q
4/
Evidence 4)
CA balance at end Q (p23) is $1.74bn, only v slightly lower than at end of 1Q ($1.85bn). This is the ABL and is backed by finished goods inventory...which fell A LOT QoQ ($2.15bn -> $1.6bn)
Why is the CA not being paid down a lot more if $TSLA is so 💰 rich now?
5/
CA balance at end Q (p23) is $1.74bn, only v slightly lower than at end of 1Q ($1.85bn). This is the ABL and is backed by finished goods inventory...which fell A LOT QoQ ($2.15bn -> $1.6bn)
Why is the CA not being paid down a lot more if $TSLA is so 💰 rich now?
5/
Evidence 5)
Unused letters of credit (LoC) outstanding (p34) was essentially unchanged QoQ ($224 -> $216mm). All else equal a large cash infusion should create an increase in LoC availability, not an unchanged position or slight decrease....so what gives?
6/
Unused letters of credit (LoC) outstanding (p34) was essentially unchanged QoQ ($224 -> $216mm). All else equal a large cash infusion should create an increase in LoC availability, not an unchanged position or slight decrease....so what gives?
6/
Evidence 6)
Credit availability (p48). This actually WENT DOWN QoQ ($1.99bn vs $2.11bn), even though they raised $2.4bn cash (and $850mm equity) and total net debt went down QoQ ($7.6bn->$6.8bn)...
Again - why would total credit availability go down if B/S cash was there?
7/
Credit availability (p48). This actually WENT DOWN QoQ ($1.99bn vs $2.11bn), even though they raised $2.4bn cash (and $850mm equity) and total net debt went down QoQ ($7.6bn->$6.8bn)...
Again - why would total credit availability go down if B/S cash was there?
7/
Evidence 7)
$TSLA rolled the Solarcity term loan out again (p24) despite the supposed low nominal amount ($164mm) relative to the amount of purported $ on B/S...again, why, if the cash is there?
8/
$TSLA rolled the Solarcity term loan out again (p24) despite the supposed low nominal amount ($164mm) relative to the amount of purported $ on B/S...again, why, if the cash is there?
8/
CONCLUDING HYPOTHESIS based on above:
True intra-quarter avg cash balance is close to MM funds ($1.7bn)...this incl restricted cash ie $$ available for daily ops is under $1.5bn
O/seas cash ($570mm per the Q) cannot be repatriated for debt service/onshore needs in US
9/...
True intra-quarter avg cash balance is close to MM funds ($1.7bn)...this incl restricted cash ie $$ available for daily ops is under $1.5bn
O/seas cash ($570mm per the Q) cannot be repatriated for debt service/onshore needs in US
9/...
Vast majority if not all of $$ raised in May offering went out door on Jul 1 to pay vendors (A/P) and especially expenses (accrued liabilities) which have been stretched for multiple quarters
10/...
10/...
Key point is intra-Q CF w negative W/C payback in another demand 'air pocket' scenario could easily see $TSLA need to tap mkts again (esp in advance of October $566mm maturity)
END $TSLAQ
END $TSLAQ
