Tesla: Revelation Of Regulatory Credits And The Questionable Accounting

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About: Tesla, Inc. (TSLA), Includes: FCAU, TM, VWAGY
by: Sunil Shah
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Summary

Tesla's second quarter 2020 blew Street expectations in generating a 50 cent/share GAAP profit where endless debate focused around the odds of a loss.

That evening in the after-hour market Musk's superlatives propelled the share price to a peak of +8% or the addition in worth ($23 Bn) to roughly equal Ford.

This article focuses exclusively on the dominant surprise, the regulatory credits that represented $428m of profit of the $104m GAAP net income.

Mr. Market regained some sobriety by the end of following day, erasing Ford's value plus another $15bn, as Tesla closed down 5%.

Read on to understand why Tesla's Questionable Accounting for regulatory credits for the quarter and their vanishing prospects portend further downside.

Although there are many questions on what could be the world's most contentious valuation for a company, this article focuses exclusively on one issue: the regulatory credits for Tesla (TSLA). We'll take a