Thread by @ChrisBloomstran

This is not a comparison I'd make, Gary. Completely different businesses, completely different capital requirements and structural profitability. At the end of 2017 $AMZN earned a net margin of 1.3%, but anybody who understood the company knew the margin was headed way higher. 1/

https://twitter.com/garyblack00/status/1397228411630858240

It took no fanciful dreaming to understand $AMZN's net margin would likely grow to perhaps 10% over the next decade, a 10x increase. Investors knew they weren't paying anywhere near the 250x-300x multiple to earnings you suggest, but far less to a realistic achievable margin. 2/

The net margin has already grown to 6.4% over the last year and 7.5% in the most recent quarter. Importantly, Amazon's enormous capital requirement to grow was clearly scalable. Capex will now match depreciation & returns on equity net of the enormous cash balance are mid 20s. 3/

Amazon's core retail operates with negative working capital. Teslas? To the extent Amazon borrowed, they also produced a growing cash balance which offset the debt. I'm yet to see a cogent case properly estimating $TLSA's capital needs and its prospective returns on equity. 4/

It's a car company, an industry requiring $1 of capital to produce $1 of annual revenues. Amazon produces $4 of revenues for every $1 of net capital (headed higher), with more modest capital needs prospectively. Autos don't earn mid-20s on equity and throw off prodigious cash. 5/

@elonmusk was given over 20% of the company in two egregious option grants. Vesting occurs at stages of prototype, production & revenues. The only profitability requirement is EBITDA, which as a capital intensive auto maker ignores pesky charges for interest and depreciation. 6/

These are very real expenses if you ask the car folks in Detroit, Germany and Japan. Amazon's revenues have grown 2.5x since 2017 with the profit margin up almost 6x on its way to 10x. Dilution has been all of 4% cumulative. What is and what will be Tesla's dilution rate? 7/

Amazon is now at the point where it will generate cash by the truckload. Tesla will no doubt grow its sales at a high clip over the next 3 1/2 years. Profitability against equity and capital eludes the conversation at Tesla, ARK and elsewhere. Why is that? Is not ROE relevant? 8/

Convince your followers Tesla will be operating at a mid-20's ROE in 3 1/2 years, throwing off enormous free cash and set to be repurchasing shares in earnest. Then you can make the comparison of Tesla to Amazon circa 2017. Until then the comparison is of a peach to a lemon.