Tesla Slides After Einhorn Questions “Suspect” Accounts Receivable, Income Statement

Tesla Slides After Einhorn Questions “Suspect” Accounts Receivable, Income Statement

It was only last November that David Einhorn and Elon Musk took their longstanding disagreements over Tesla’s financial viability to Twitter, launching a public feud between the two public icons which everyone could enjoy in real-time. Now, Einhorn is back for round two.

Appending a note to Elon Musk under a tweet he had first sent to the CEO back in November of 2019, Einhorn weighed in with questions about yesterday’s Tesla earnings, where he again questioned Tesla’s Accounts Receivable, incidentally the same question we highlighted in yesterday’s post discussing Tesla Q1 earnings, namely how it is possible that the accounts receivable for the company was still a whopping $1.3 billion.”

Here’s Einhorn’s version:

I remain curious about your accounts receivable. Tesla’s claim for why there are so many for a product where the customers pay up front, was that sales are crazily concentrated in the last days of the month – so much so that it matters if the month ends on a weekend.”

He continued, using Musk’s previous arguments against him:

“This quarter ended on a Tuesday. And, by all accounts sales were not back-end loaded as most of your market was shut-down at the end of March. Yet, Days Sales Outstanding rose from 18 days to 21 days. Can you or Zack explain?”


Einhorn then focused on Tesla’s margin numbers, just as we did yesterday.

“I have another question,” he wrote.

“This quarter your production was lower and split over two factories, affecting cost absorption particularly in Fremont. Your average selling price was lower. Your mix had fewer high margin Model S/X. You ramped up Model Y. Both factories were interrupted driving up costs.”

“And, though you didn’t discuss it, currency should have hit your margin by 2-3% compared to last quarter. All of these factors appear to be headwinds to your auto gross margin (excluding Regulatory credit sales) – which barely budged,” he continued.

“Can you or Zack explain?” he asked again.

“Otherwise, I will continue to be left wondering if not only your accounts receivable are suspect, but your income statement as well.”

The assault from Einhorn comes at an interesting time for Tesla. Not only has the issue of Tesla’s potentially fraudulent accounts receivable been percolating for the past three quarters, but as we also wrote earlier today, Musk is going to be due a large compensation award based on Tesla’s rocketing stock price, even as the company remains largely shut down.

Despite the issues of months past, including shutting down Fremont for the coronavirus, laying off hundreds of contractors and staff and putting himself on the hook for his own board’s D&O insurance, Elon Musk still seems set to cash in on a ~$845 million payday in the form of 1.69 million stock options at $350 per share.

In any case, since this is not the first time Einhorn has questioned Tesla’s AR without getting an answer, we doubt that an answer will be forthcoming this time either, even if the stock price – which slumped after the Einhorn tweet, is demanding some response.


Tyler Durden

Thu, 04/30/2020 – 12:35

This post has been republished with permission from a publicly-available RSS feed found on Zero Hedge. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

-> Click Here to Read the Original Article <-

About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Bringing together a variety of news and information from some of today’s most important libertarian thought leaders. All feeds are checked and refreshed every hour and pages auto-refresh every 15 minutes. External images are deleted after 30 days.

Time since last refresh: 0 second

Publish Your Own Article

Follow The Libertarian Hub

Please consider donating using any of the cryptocurrencies below or use the Brave browser to tip using Basic Attention Tokens (BAT). Your anonymous contributions help keep this website running for everyone to enjoy!


Take Control of Your Domain Names
The Ultimate Managed Hosting Platform

Weekly Newsletter

Newsletter Signup

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!

Weekly Newsletter SignupTop 5 Stories of the Week

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!