Audit firms are required by their professional standards to consider the possibility that the financial statements contain fraudulent misstatements and/or omissions. The auditing standards contain a number of indicators, or “flags,” that should alert auditors to the risk of fraud. PwC is likely beginning its client retention and planning for year-end audits right about now.
PwC client Tesla (NASDAQ:TSLA) is throwing off an extraordinary plume of fraud-risk indicators that is visible from deep space; red flags, orange flags, floating pink flags at high tide. As an artistic achievement, this colorful extravaganza might make Christo and Jeanne-Claude green with envy. Somehow we don’t think PwC will have the same reaction.
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On Thursday, Zuckerberg struck an upbeat tone in his post about the rocket failure, noting that the company has other strategies in the works to expand internet connectivity across the world. Aquila, the Facebook-built drone, he noted, recently undertook its first successful flight in the desert.
Still, the setback will delay Facebook’s ambitious plans and even more ambitious timetable.
Shortly after his SpaceX comments, Zuckerberg struck a cheerier note by posting some “good news” from the region: A family of baby giraffes was seen on his safari.
Read more "SpaceX explosion puts goals of Facebook, Musk into question"
Thursday started badly for Elon Musk when one of his SpaceX Falcon 9 rockets exploded on the launchpad, days before it was set to take a payload into orbit. Things got worse when Mark Zuckerberg discovered his $95 million satellite was sitting on top of the rocket, and took to Facebook to express his “deep disappointment.”
But as it turns out, blowing up a multi-million-dollar rocket was not Elon’s most expensive mistake yesterday.
As Bloomberg reports, share movements and regulatory filings related to Tesla and SolarCity, two of Musk’s other companies, cost him $779 million yesterday. The stock in both those companies (which are set to merge) took a sharp drop yesterday, with Tesla down 4% and SolarCity dropping by 9%. According to Fortune, the drop was due to cash concerns in Tesla, and ongoing worries from investors over Tesla’s merger with SolarCity.
Read more "Yesterday, Elon Musk lost a rocket and $780 million"
“During the third quarter, we will be using substantial amounts of cash in connection with conversions of our 2018 Notes and we could pursue other actions to reduce our outstanding balance of convertible notes, which could require further outlays of cash,” Tesla wrote in the filing with the U.S. Securities and Exchange Commission.
If the two third-quarter payments are subtracted from the mid-year cash balance, Tesla would have $2.1 billion left over. The company on Wednesday told analysts it planned $1.75 million in the second half of the year on capital expenditures.
Tesla declined to comment beyond the filing.
Read more "Tesla Motors discloses $1.1 billion in third-quarter cash needs"
“All we have ever requested is that any new manufacturer be treated the same as other vehicle manufacturers in Missouri, which are all required to employ a system of sales that uses an automobile dealer to deliver the vehicle to Missouri consumers,” Smith said.
Read more "Judge Says Tesla Can’t Sell Directly to Missouri Customers"
“The Palo Alto company is also building a $5-billion battery factory in Nevada. Many analysts are wondering whether it can maintain enough cash flow to see those projects to completion.
Kelley’s Brauer pointed out that state incentives for buyers of electric cars, which have helped power Tesla’s success, will be expiring over the next few years. Brauer believes Musk “is going to run out of tax rebates before he gets to the real world consumer.”
Tesla’s shares slid $11.24, or 5.3%, to $200.11. Shares of SolarCity fell even further, closing down $1.88, or 9.1%, to $18.78.”
Read more "After SpaceX rocket crisis, Elon Musk also faces Tesla safety and cash-flow issues"