Summary

  • Company announced this weekend they did not meet sales or production estimates for Q2.
  • Tesla decided to release this news in the middle of a 3-day holiday weekend, an insulting move to loyalists.
  • Tesla claims it’s going to push 50,000 cars in the back end of this year.

Tesla wonders why it has so many skeptics, and then it goes and does something like this.

The way Tesla (NASDAQ:TSLA) released its Q2 sales and production numbers was in extremely poor taste. This comes in a long line of moves that we think should both insult existing shareholders and also raise red flags for those watching from the outside.

First, we heard that Tesla is not going to need additional funding in the first quarter of 2016 as they commented that they would be non-GAAP cash flow positive heading into the end of this year. Then, we were told that due to the company’s pre-orders of the Model 3, they would in fact need to do an equity raise.

Then, Goldman Sachs upgraded Tesla the morning that they announced that they were going to be issuing $1.6 billion in new equity.

Just a month or two after this, Tesla shareholders got the untimely news that Tesla was considering buying out cash furnace SolarCity (NASDAQ:SCTY). This has sparked an immense amount of controversy about the company’s governance.

The SolarCity news comes just weeks after the company’s suspension in its Model S was questioned alongside nondisclosure agreements it was making customers sign after performing out-of-warranty repairs.

That came days before we found out the company’s automated driver system was under investigation by U.S. auto safety regulators. In full disclosure, regulators also found a DVD player in the vehicle where the death occurred.

But all of that comes at a time after many executives have left the company over the course of the last 24 months. Jim Chanos sees this as an ominous sign, and we do as well, which is why we’ve written several articles on it culminating in our March 2016 article questioning whether or not something fishy is going on behind the scenes.

Author: Scott Tzu

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