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Nonsense from John Petersen

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John Petersen said:
The Dragon will have a late rendezvous with the space station.....

So what? This just shows JP's ignorance right from the start. How often in the history of spaceflight has everything gone flawlessly?


John Petersen said:
After working my way through Tesla's balance sheet data and its prior SEC filings in an effort to estimate its year-end working capital position, I was surprised to calculate a $23 million working capital deficit at year-end. The figures were far worse than the $3 million working capital surplus J.P. Morgan forecast in mid-December.

J.P. Morgan probably takes exception to JP's comment.

John Petersen said:
Since then I've been waiting patiently and quietly to see whether the auditor's report in Tesla's Form 10-K will include the dreaded going concern paragraph you frequently see in micro-caps:
The accompanying financial statements have been prepared assuming that ABC Company will continue as a going concern. As discussed in Note X to the financial statements, ABC Company has suffered recurring operating losses, negative cash flows from operating activities, recurring working capital deficits and adverse key financial ratios that raise substantial doubt about the company's ability to continue as a going concern. Management's plans in regard to these matters are also describe in Note X. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

I wouldn't be completely surprised to see this. Tesla hasn't reported a profit yet so an auditors warning would be normal.

John Petersen said:
A huge chunk of Tesla's cash came from increases in accounts payable and accrued liabilities, which surged from $190.5 million to $343.2 million during the quarter. While vendors who make automotive parts usually offer reasonable credit, they do want to be paid promptly so they can pay their own bills. Tesla's suppliers can't be thrilled by its decision to hold onto $152.6 million of cash for year-end window dressing.

It doesn't seem to have occurred to JP that Tesla has been ramping up production, therefore the flow of parts has increased, and therefore there are many more supplier transactions. It would have been very strange if this figure hadn't increased dramatically.

John Petersen said:
There was also a $109 million increase in inventory to $268.6 million, which includes 350 cars that were built in Q4 but not delivered to customers.

Ummm JP, that's less than one week of production. Actually amazing that Tesla holds so little finished production.

John Petersen said:
At planned production rates it will take substantially all of Q1 to turn roughly $245 million of parts inventories into finished goods and then convert the finished goods into cash.

Wow. That's keeping inventories tight for complex manufacturing. Good job Tesla.

John Petersen said:
The most surprising entry on Tesla's year-end balance sheet was a reservation payments balance of $138.8 million, a $500,000 increase from Q3.....

Tesla reportedly delivered 2,400 cars in Q4. It's my understanding that the deliveries included 1,000 Signature Editions that required $40,000 deposits and 1,400 other vehicles that required $5,000 deposits. It's also my understanding that Tesla booked 4,200 new reservations during the quarter that each required $5,000 deposits. If my understanding of the deliveries and reservations is accurate, the reservation deposits on Tesla's year-end balance sheet should have fallen by $26 million. The only reasonable explanation is that additional deposits from existing reservation holders who wanted to avoid a pending price increase offset the cash drain.

You think that Tesla went out and asked existing reservations holders for more deposits?!? JP, what are you smoking? This must the stupidest comment of the entire piece.....

John Petersen said:
If we assume for the sake of simplicity that Tesla has received an average deposit of $10,000 on each car it will deliver this quarter....

Completely, factually wrong assumption. BTW, JP also seems to have ignored Model X deposits in his calculations.

John Petersen said:
As near as I can tell, that's the biggest reason the Maxim Group expects Tesla's working capital deficit to explode to $61.8 million by the end of this month.

Maybe JP should have at least read Maxim Groups post earnings comment:

Maxim Group's Aaron Chew said:
Tesla is now producing 400 vehicles per week after supply-chain hiccups limited production. “Worries over production now nipped in the bud, we believe 4Q12 reservations should largely put to rest concerns about 2013 demand given 15k reservations entering the year before test drives were offered in Europe (Feb. 2013) and Asia (3Q13). With TSLA on the verge of uprooting doubts about its 2013 targets, we expect the stock to power along to our $50 PT."


I'm going to skip to the end because so much of the article is plain nonsense:

John Petersen said:
I've heard all about Tesla's plans to manufacture and sell 4,500 cars this quarter and generate a small non-GAAP profit (profit before the ugly truth). What many fail to grasp is that Tesla's practice of front-loading cash through reservation deposits has set up a perfect storm for breakeven non-GAAP income while cash resources go swirling down the drain.
Deposits aren't reflected on any income statement, whether GAAP or non-GAAP. How can we trust that JP wants a reasonable discussion on Tesla cash flow as long as his basic assumptions are nonsense.

 
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This doesn't surprise me. As someone who is in the biz, I can unequivocally say that JP doesn't understand debits and credits, financial statements, nor the different types of audit opinions. He will not earn his penny off of me. I stopped reading his slop a long time ago.
 
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This doesn't surprise me. As someone who is in the biz, I can unequivocally say that JP doesn't understand debits and credits, financial statements, nor the different types of audit opinions. He will not earn his penny off of me. I stopped reading his slop a long time ago.

On the contrary, I think he understand quite well, but his aversion to EVs and particularly Tesla Motors leads him to distort the truth.
 
John P doesn't care if what he writes is factual or not. He cares about the page views and comments, because that puts money in his pocket. Any negative article about Tesla has proven to generate a lot of traffic, so why should he stop with the fud? It works every time.

Eventually he will go away, because all his predictions will be proven to be nonsense. In the meantime, I'm refusing to knowingly follow any link that lands me on an article he wrote.
 
BTW JRP3:
Given your interest in JP's articles, why don't you keep track of his predictions, and compare them to what actually happens later on?
I`ll add one JP prediction:
In Q3/early Q4 2012 in a reply to one of my comments he stated that reservations would be a puddle drying in the sun, and that Tesla would quickly run out of customers in 2013 (he took the +/- 15.000 reservation base and predicted when Tesla would have no more orders left.)

The reason he made that comment whas because I provided factual numbers combined with predictions made on the basis of the reservation pace. Clearly the current Model S reservation pace proves him wrong (about 50-55 per day world wide). But I would personally like to see Model S reservation pace climb back up to 80-90 a day within the next few months.
 
Nt 10-K, NOTIFICATION OF LATE FILING

John P is running out of bullets.

From the SEC website.

http://www.sec.gov/Archives/edgar/data/1318605/000119312513088624/d452995dnt10k.htm
--
PART III — NARRATIVE

State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.

Tesla Motors, Inc. was unable to timely file its Annual Report on Form 10-K for the year ended December 31, 2012 because a probable error in the presentation of certain non-cash items relating to capital expenditures on its consolidated statements of cash flows was identified during the final review of the Form 10-K. As a result, Tesla could not complete its financial closing process prior to March 1, 2013.

It is important to note that this will have no impact on previously reported total cash and cash equivalents, consolidated income statements, consolidated balance sheets, or free cash flows (defined as cash flow from operations less capital expenditures), including those reported in our earnings release on February 20, 2013.

Tesla believes that some unpaid capital expenditures in 2011 and 2012 would be more accurately classified as operating activities, rather than investing activities. Although the review is continuing, the consolidated statements of cash flows will likely be revised for the year ended December 31, 2011 by reducing cash flows used in investing activities with a corresponding increase in cash flows used in operating activities. A similar adjustment will be made to the statement of cash flows for the year ended December 31, 2012. These adjustments affect the quarters and full years ended December 31, 2012 and 2011, and could include a reclassification of approximately $31 million and $15 million from cash flows used in investing activities to cash flows used in operating activities for the years ended December 31, 2012 and 2011, respectively.

Tesla currently anticipates that the Form 10-K for the year ended December 31, 2012 will be filed as soon as practicable and no later than Monday, March 11, 2013.
 
BTW JRP3:

Given your interest in JP's articles, why don't you keep track of his predictions, and compare them to what actually happens later on?

I remember JP predicted doom based on the fact that TM delivers Signatures first, and in his opinion TM will run out of cash becouse each signature deposit was 40k. What actually happened - now TM have more money in deposits thanx to strong sales because of different COtY etc...

Before that JP predicted that when TM will raise money, they would have to sell shares for ridiculously cheap price, something like half the company for couple hundred millions. In reality secondary offering was just 1% discounted from previous market closing price...
 
JP has to try to get page views because his other investing activities haven't paid off lately. He's even had to ignominiously move out of his "Castle in Switzerland" thereby nullifying all previous contentions of his superior investment capability witness-able by his regal living conditions. Now he's flailing to try and salvage what's left of his lifestyle.
 
JP...'s even had to ignominiously move out of his "Castle in Switzerland" thereby nullifying all previous contentions of his superior investment capability witness-able by his regal living conditions. Now he's flailing to try and salvage what's left of his lifestyle.
I'm sure that he would say that he had sold his Swiss real estate holdings at a handsome profit because he had decided to live {choose:} closer to the ocean, closer to family, closer to Axion HQ, etc.