🚀 📉 Tesla Shares Jump Despite Revenue & Earnings Miss
Happy Wednesday all,
Hope you’re having a wonderful week so far!
So, according to the Tesla earnings call, Elon Musk signaled his company’s intention to create a more affordable vehicle not too long after reports circulated that Tesla had scrapped the concept of a ‘Model 2’, a $25,000 vehicle. I’m really curious to see what their more affordable lineup of vehicles will look like compared to the Chinese EV manufacturer BYD, who is currently giving Tesla a run for its money on the global scale. Read more on Tesla’s earnings call below.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
🚀 Hedge Funds Are Succumbing to Mind-Boggling Returns of Memecoins (BBG)
👑 Gold Futures Hit New Record on Central Bank Buying, Safe-Haven Demand (WSJ)
🏦 Private Equity Firms Are Borrowing Against Their Funds’ Assets (BBG)
📉 Cathie Wood’s Popular ARK Funds Are Sinking Fast (WSJ)
🚕 Elon Musk’s Robotaxi Dreams Plunge Tesla Into Chaos (BBG)
📈 Why the Fed keeping rates higher for longer may not be such a bad thing (CNBC)
👟 JD Sports to Buy Hibbett for $1.1 Billion to Fuel US Growth (BBG)
🔐 Jack Dorsey’s payments company, Block, is building its own bitcoin mining system (CNBC)
The Weekly Brief
Tesla Shares Soar on Cheaper EV Strategy Despite Weak Sales and Earnings Miss
Tesla spent the past year slashing prices on its vehicles in a failed effort to boost sales. Growth in vehicle deliveries slowed last year and then dropped 8.5% in Q1, in which the company built ~46k more cars than it sold. In Q1, the company burned through more than $2.5bn in cash, the largest outflow ever.
Earnings per share fell to 45 cents, short of consensus expectations for 52 cents. Revenue dropped almost 9% to $21.3 billion, short of the consensus estimate of $22.3 billion.
Despite the weak financials, Tesla shares soared 14% today as Elon Musk noted that Tesla hoped to launch less-expensive vehicles as soon as late this year. Tesla had been the worst performer in the S&P 500 this year.
Airlines Now Required to Pay Automatic Refunds for Canceled Flights
According to new US Department of Transportation (DOT) rules, airlines must now automatically refund travelers if their flights are canceled or significantly altered.
The significant changes to flights that qualify for refunds include:
Departure or arrival time that moves by more than three hours domestically or six hours for international flights
Being downgraded to a lower class than originally purchased, as from first class to economy
Change of departure or arrival airport
Increase in the number of connections
Changes to connecting airports or planes flown if they are less accommodating for people with disabilities
Travelers will also get refunds for checked bag fees if the bag is lost and not delivered within 12 hours of a domestic flight’s arrival and anyone who pays for a service such as in-flight Wifi and doesn’t receive it will also get their money back.
Cocoa Prices Shoot Up on Supply Shortage and Margin Calls
Cocoa prices have jumped ~160% this year as poor harvests in West Africa have led to a supply shortage.
To add to the mess, the sudden rally means that traders who have used cocoa futures to hedge against physical holdings of cocoa are getting margin-called and are forced to close out their position, driving up volatility.
With a shift in weather expected to help global supply recover next season and short-term weather/crop conditions in West Africa expected to improve, it’s likely that the cocoa market could return back to normal price action soon.