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| Sadly Tomorrow Never Comes |
Tesla
announced
4Q19 net income of USD 105 million.
Accompanying
the announcement, Elon
Musk said:
A lot of retail investors have deeper and more accurate insights than many of the big institutional investors
He went on to predict great things for Tesla’s future. A
claim he’s made before.
In
that respect Tesla
is like Brazil - its
bright future always remains in the future. Or the bar portrayed above.
Some 9 years after its IPO, Tesla still has to turn an annual profit.
Excitement
over the 4Q19 announcement should be tempered by realisation that
Tesla has not yet had a significant profit from its basic lines of
business.
An important point for investors to consider unless harvesting government handouts is the key business of Tesla.
In
4Q19 Tesla’s revenues included some USD 133 million from sale of
regulatory credits. So Tesla’s basic businesses earned
a negative USD 28 million in the Quarter.
That "performance" is not as good as 3Q19 where the reported net income of USD 143 million
included regulatory credits of only USD 134 million. In that Quarter
Tesla’s basic businesses earned a whopping USD 9 million. And you thought Saudi investment banking fees were huge.
For
2019
reported net income was a loss of USD 862. Total regulatory credit
sales were USD 596
million.
So the net income from basic businesses was a USD 1,450
million loss.
With performance like that AA
can’t understand why the stock has hit USD 1,000 per share.
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