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Preferred Stock – Valuation Adjustment

Preferred stock is a hybrid instrument that carries no voting rights but has a senior claim on assets and cash flows to common stock. Dividends usually must be paid out to preferred stock owners before common stock owners can receive any money. In the event of liquidation, preferred shareholders also have priority.
by David Trainer, Founder & CEO
New Constructs
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Danger Zone 8/12/13: Tesla Motors (TSLA)

Tesla Motors (TSLA) is in the Danger Zone this week. Up over 350% in 2013, the electric automaker has dominated headlines and made a lot of investors very happy (and a lot of shorts very angry). At ~$150/share, it’s no secret that the stock is expensive. What most investors don’t realize is that there are some significant details buried in the footnotes of TSLA’s SEC filings that materially affect the outlook for shareholders in the company.
by David Trainer, Founder & CEO
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Excess Cash – Invested Capital Adjustment

Most companies hold some cash—or cash equivalents in the form of investments—above this required amount. Companies hold excess cash in order to cushion against economic downturns, prepare for acquisitions, or any number of other reasons. Sometimes, past profits pile up on balance sheets and are a form of excess cash. Excess cash is not needed for the operations of a company. It is removed from our calculation of invested capital.
by David Trainer, Founder & CEO