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Tesla: Dog And Pony Show

Feb. 05, 2019 4:25 PM ETTesla, Inc. (TSLA)MXWL, PCRFY312 Comments
Bill Maurer profile picture
Bill Maurer


  • New report casts doubt over Buffalo factory progress.
  • Maxwell acquisition curious to say the least.
  • Panasonic cuts forecast due to Tesla's troubles.

Last week, I discussed the curious case of Tesla's (NASDAQ:TSLA) solar business, which has been a complete train wreck since the purchase of SolarCity. The 2016 deal has crippled Tesla's balance sheet and income statement, which I believe has hampered the company's automotive ambitions. Just a few days later, we got another potential look at how things are going at the Buffalo factory, and it seems to be even worse than thought. Today, I'll discuss that news, along with the curious acquisition Tesla apparently made, and the negative update coming from a key business partner.

The Buffalo boondoggle:

The traditional solar business that Tesla acquired more than two years ago is just a small fraction of that size now. While that may be making the company's operating expense line look pretty good currently, it also means Tesla may not be satisfying job requirements at Gigafactory 2 in Buffalo, New York. As I've also pointed out dozens of times in recent years, the solar roof product is another fiasco that's still ongoing.

On Monday, WIVB news posted a scathing article about Tesla's Buffalo plant. The article details stories from former employees who talked about being paid to do nothing as production was almost nonexistent. When a media event was due to come, Tesla built walls to hide unused equipment and blocked off large areas. Employment numbers for the end of 2018 are not yet known, but former employees doubt they are as high as Tesla states. Of course, end of 2018 figures were before the company's January layoff announcement, and roughly 50 Buffalo employees were laid off in that round the article says. As I discussed last week, the lack of major progress for the solar business could potentially mean large fines down the road for missing employment promises.

The curious

This article was written by

Bill Maurer profile picture
I am a market enthusiast and part-time trader. I started writing for Seeking Alpha in 2011, and it has been a tremendous opportunity and learning experience. I have been interested in the markets since elementary school, and hope to pursue a career in the investment management industry. I have been active in the markets for several years, and am primarily focused on long/short equities. I hold a Bachelor of Science Degree from Lehigh University, where I double majored in Finance and Accounting, with a minor in History. My major track focused on Investments and Financial Analysis. While at Lehigh, I was the Head Portfolio Manager of the Investment Management Group, a student group that manages three portfolios, one long/short and two long only. I have had two internships, one a summer internship at a large bank, and another helping to manage the Lehigh University Endowment for nearly a year. Disclaimer: Bill reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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