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SolarCity: Scary Definition Of Positive Cash


SolarCity (SCTY) rebounds by nearly 7% today after collapsing Tuesday on the weak guidance for the year. The stock though is remains a high risk as the company continues to have scary goals. 

Via the shareholders letter, SolarCity further disclosed the goal of generating positive cash this year. The company though detailed that the goal includes using financing to cover all expenses and not cash generated by operations. Per the letter:

Our goal to generate "positive cash" does not represent "free cash flow" as it is traditionally defined (as operating cash flow less capex), as this measurement explicitly excludes key project financing inputs that largely run through the financing cash flows. 

The company continues to complicate the financials with non-standard financial measures. Typically when a company makes such moves, the outcome is not good. 

Disclosure: No position