Tesla Inc. (NASDAQ:TSLA) has reportedly encountered a $1.4 billion gap between its capital expenditure and the valuation of related assets over the last six months of 2024.
What Happened: This discrepancy, highlighted in a report by Financial Times, comes as Tesla’s stock market valuation has plummeted from $1.7 trillion to under $800 billion.
According to the report, Tesla’s cash flow statement reveals $6.3 billion spent on property and equipment purchases in the third and fourth quarters of 2024. However, the balance sheet shows only a $4.9 billion increase in the gross value of property, plant, and equipment during the same period.
Tesla did not immediately respond to Benzinga’s request for comment.
See Also: Elon Musk’s Tesla Targeted With Arson Attacks In Las Vegas, Kansas City: Report
Despite Tesla’s substantial cash reserves of $37 billion, the company raised $6 billion in new debt last year.
This raises questions about Tesla’s financial strategies, especially as it plans to invest heavily in AI infrastructure, robots, computing, and batteries, with at least $11 billion earmarked for each of the coming years.
Financial experts, including Jacek Welc from SRH Berlin University, suggest that such financial anomalies could indicate weak internal controls or aggressive expense classification.
Tesla’s ongoing capital raising, despite significant cash flow, is seen as a potential red flag for accounting misstatements.
Why It Matters: The financial discrepancy at Tesla comes amid a turbulent period for Elon Musk, the company’s CEO. Musk has been juggling his responsibilities between Tesla and his role in the Department of Government Efficiency (DOGE) under the Trump administration.
In a recent interview, Musk admitted to facing significant challenges in managing his businesses, coinciding with a sharp decline in Tesla’s stock.
Investors have expressed frustration over Musk’s divided focus, with some, like Tesla’s biggest bull, voicing concerns about his attention being diverted from the company. Dan Ives from Wedbush Securities has also highlighted the unsustainable nature of Musk’s current leadership situation for Tesla’s shareholders.
Tesla holds a momentum rating of 81.80% and a growth rating of 55.07%, according to Benzinga’s Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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