Thread by @montana_skeptic

1/ Study the 10-Q & its obvious $TSLA has a liquidity crisis. The apparent liquidity is hugely misleading because of cash trapped in China & credit that can be used only in China. With no cash ever escaping China.

Let's do the numbers.

2/ Let's first calculate apparent liquidity

Cash + A/R = $9.374B. Subtract A/P & Accrued Liabilities of $6.795B and you are $2.58B to the good.

Now add $2.4B of Unused Committed Credit.

Total Liquidity: $4.98B. Sounds solid, right?

But, let's look more carefully.

3/ $2.05 B of that cash is overseas; yuan, euros, Can$. Let's say only half is in China (though I'm guessing more). Now liquidity is down to $4B.

Further, $1.522B of credit is China line (Hotel California, Shanghai Annex), & 574MM in warehouse line (not gen'l corp purposes)....

4/ Deduct the credit that can be used only in China and the warehouse line (only for leasing) and true liquidity is $1.904B...

5/ That was as of March 31. Since then, with Fremont shuttered, Tesla has been suffering Balance Sheet unwind. Are payables going out the door keeping up with cash & A/R coming in? Not a chance.

6/ Tesla absolutely must raise capital in Q2. First, though, it must correct its materially misleading statement on 10-Q p. 22. There are NO China credit line proceeds are available for general corporate purposes. Tesla has exaggerated available credit by $1.522B.

7/ I probably should have noted that Tesla can liquidate inventory. Impossible to know where it's located (how much is in China?) or what part of "Finished Goods" is new cars. The visible new car inventory appears to have hardly budged in April.

8/ Bill Cunningham, at Seeking Alpha, has made some excellent criticisms of my liquidity analysis. Anyone interested can take a peek there. Bottom line, Bill is right, it's not as dire as I said, but it's not great, either, and I expect Tesla to raise before Q2 ends.