David Einhorn Publicly Questions Tesla’s Accounting Practices

Tesla TSLA

One day after Tesla (NASDAQ:TSLA) posted a quarterly profit when the Street expected a loss – $5.99 billion in revenue, vs the $5.81 billion estimate, $1.24 EPS, versus the ($0.34) estimate – hedge fund manager and famed short-seller David Einhorn took to Twitter to publicly question Tesla chief executive officer Elon Musk and chief financial officer Zach Kirkhorn about the electric-car maker’s accounting practices.

Describing his inquiries as “More Boring Bonehead Questions,” Einhorn, who several months ago told Musk he was “beginning to wonder whether {the automaker’s} accounts receivable exist,” said that if his questions went unanswered he would continue to wonder if indeed all Tesla’s account receivables were “suspect”.

“Can you or (Zack) explain,” Einhorn wrote.

Einhorn also asked how Tesla’s automotive margins “barely budged” despite production disruptions and other factors.

In a regulatory filing Thursday, Tesla disclosed that an unidentified entity represented more than 10% of its accounts-receivable balance, as of March 31. The contribution was related to sales of regulator credits, the company said.

Emissions credits Tesla sells to other car manufacturers jumped to $354 million last quarter from $111 million in the three months ended June 30, 2019, a sum that exceeded the co.’s $227 million adjusted net income.

Price Action

Tesla’s stock was trading lower by more than 4% at $750 at the time of publication Friday. Ticker has surged 87% since January.

Reference: Bloomberg

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