Tesla's latest battle to win over Wall Street skeptics on the company's outlook

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Tesla raised more than $2 billion in stocks and bonds earlier this year, but its shares remain down substantially in 2019 as it gets set to report Q3 earnings on Wednesday. Does Musk's new 34-year-old CFO have a better handle on the balance sheet than Wall Street has on the stock?

Elon Musk's electric vehicle maker raised more than $2 billion in stocks and bonds earlier this year under new CFO Zachary Kirkhorn, but its stock is still down substantially in 2019.

Tesla's shares faced immediate pressure on the day Tesla announced he had taken over the job held by his predecessor, Deepak Ahuja. The stock quickly recovered, but it would keep falling through the first half of 2019 as the world's largest maker of electric cars had to address its balance-sheet challenges. Wednesday's

Kirkhorn, a former McKinsey consultant who joined Tesla in 2010, was not available for an interview ahead of earnings, but he is the person who, more than anyone other than CEO When Tesla reports its latest quarterly financials on Wednesday, expectations are for margins to slip to 18.5%, Nelson said. If they improve next year, even if it's not close to 25% yet, Tesla can generate $1.7 billion positive cash flow even after $2 billion in capital spending, according to JMP Securities analyst Joe Osha who is forecasting capital spending at a below-consensus level of $2 billion in 2020.

In fact, while the capital raise helped with the balance-sheet troubles, it didn't prop up the stock for long. Tesla's shares fell precipitously after it raised the $2 billion in capital in early May, falling to their lowest stock price of the year by July, at under $180. Over the past month, Tesla's shares have been rising, but they are down 23% year-to-date.

 

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