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My understanding is that amazon was basically cash flow positive, but ran GAAP losses and never really "struggled" financially. Whereas Tesla does indeed have
by tryitnow 7y ago
My understanding is that amazon was basically cash flow positive, but ran GAAP losses and never really "struggled" financially.
Whereas Tesla does indeed have some systemic financial issues.
In other words Amazon could have been "profitable" on a GAAP accounting basis fairly early on, but Tesla would struggle to do that.
- amyjess 7y agoSpecifically, Amazon was cash-flow positive but deliberately chose to reinvest all their profits into the company instead of paying out dividends, so that appears on the books as a loss but it really isn't.
- psychrometer 7y agoTesla makes a profit on every car that they sell[0]. There are more people wanting to buy Tesla's than they can currently produce[1]. Telsa needs to spend more money to increase production. They make money on each car sold and they can sell a lot more than they currently do. Tesla being in the red in order to increase production is the same scenario that Amazon was in. [0] https://www.fool.com/investing/2019/07/26/tesla-management-talks-model-3-gross-margin-demand.aspx https://www.fool.com/investing/2019/07/26/tesla-management-t... [1] https://electrek.co/2018/07/03/tesla-model-3-long-backlog-reservations-production-rate/ https://electrek.co/2018/07/03/tesla-model-3-long-backlog-re...