Elon Musk and Tesla shareholders are at a crossroads.
A fierce price war, rising competition in North America, Europe and China and Musk’s demand for billions in new Tesla shares have sent the electric vehicle stock plunging this year, shedding nearly $130 billion from its market capitalization.
Shares fell nearly 8 percent in premarket trading on Thursday after Wednesday’s disappointing year-end results.
But Musk sees reason for optimism. He asked investors to look beyond 2024, predicting that “major growth waveFueled by low-cost Tesla models, which will be partly built in Austin, Texas and Mexico.
Wall Street doesn’t seem to be getting the message. The latest decline in the stock comes after Tesla reported that fourth-quarter profits nearly doubled to $7.9 billion — largely due to a one-time tax break. The company also declined to provide detailed full-year guidance, but said it expected sales growth to be “significantly slower.”
“Tesla is signaling that the days of 50 percent year-over-year growth or 30 percent to 40 percent growth in 2024 are not coming,” Morningstar Research analyst Seth Goldstein told Bloomberg. “At a certain point, you can’t cut prices.”
Musk doubled down on his demand for more shares. He stunned investors this month when he said if the board did not increase his stake from 13 percent to 25 percent, he would consider developing new artificial intelligence products “outside of Tesla.” It also spooked Tesla bulls, who feared that giving so many shares to Musk would dilute their stake. Failure to do so could cause Musk to lose the AI work that had boosted investor enthusiasm for the stock.
Musk said the move was a form of protection from “some kind of random shareholder advisory firm.” He added, “There are a lot of activists who basically infiltrate those organizations and, you know, they have these weird ideas about what should be done.”
What’s going on over here
Interest rates are once again in the headlines. Expectations from the European Central Bank Leave its key lending rate unchanged Today, however, investors will be looking for clues about whether rate cuts will begin by the summer as signs of a slowdown in inflation. And Falling growth rates are hurting the euro zone economy. The Fed’s next decision is scheduled for January 31.
The Fed has drawn an emergency funding lifeline for banks. The Bank Term Funding Program was a measure created during the regional banking crisis last year that offered cheap loans to struggling lenders amid extraordinary growth on deposits, will end in march, As a result, interest rates on new loans made by the Fed to banks will increase by about 0.5 percentage points.
Tech giants reach new valuation heights. Microsoft On Wednesday it became the second company to reach a market capitalization of $3 trillion. meta Crossed the $1 trillion mark for the first time since 2021. Both companies have received backing from investors who hope they will prove to be leaders in deploying artificial intelligence software.
‘It will not be a return to business as usual for Boeing’
Boeing’s share price is back in the red in premarket trading Thursday after the FAA imposed new restrictions on the jet maker that could hamper the company’s growth plans and its increasingly frustrated airline customers.
The regulator said that Boeing cannot increase production of 737 Max aircraft. The company was trying to increase production of the plane, which is a cash cow as it lags behind Airbus.
This is another blow for Boeing Following a January 5 episode in which a door panel blew off a Max 9 operated by Alaska Airlines. This has led to the grounding of approximately 170 Max 9s and has shaken the region’s confidence in Boeing’s production processes.
The Biden administration is increasing pressure. “Let me be clear: This is not a return to business as usual for Boeing,” FAA Administrator Mike Whitaker said in a statement Wednesday. The federal government also intends to increase scrutiny of company quality control processes. “Everything is on the table right now,” he said. pete buttigiegTransport Secretary.
Can Washington move forward? Questions are swirling about whether the White House will rescind the deferred prosecution deal Boeing agreed with the Trump administration after two deadly 737 Max crashes. liver report,
Boeing says its problems can be fixed. After meeting with lawmakers in Washington on Wednesday, Boeing CEO Dave Calhoun said, hit a reassuring note, The Max 9 issues “can be resolved in days and weeks, not months”, he said, although airline customers have expressed increasing skepticism in recent days.
It wasn’t all bad news for Boeing. FAA approves new inspection guidelines for Max 9s. This paves the way for the aircraft to fly again soon, and airlines have also been allowed to resume operations after the completion of the investigation. United and Alaska Airlines said they expect Max 9s to return to the skies in the coming days.
and reportedly boeing 737 max delivered For the first time in five years from a Chinese airline. China is an important market for Boeing’s growth ambitions.
next: Boeing is expected to give investors a year-ago outlook at next week’s earnings call, but shares have already fallen more than 16 percent this month on Max concerns.
trump vs billionaire
Following Donald Trump’s double-digit victory in the New Hampshire Republican primary, donors like Nikki Haley who supported his opponents are weighing whether to accept the inevitable and support the former president. .
But for the holdouts, Trump issued a stern warning: Get on board, or be lost.
Those who continue to donate to Haley will be “permanently banned from the MAGA camp.” trump Wrote on his Truth social platform, “We don’t want them, and won’t accept them, because we put America first, and always will!”
Haley Hit back in a post on social media: “Okay in that case…donate here. Moving rate!” with a link to the fund-raising page. She also said she had Raised over $1 million Since the New Hampshire primary.
The fight highlights a growing dilemma for anti-Trump donors. Many have turned to Haley in recent months as the best chance to challenge the former president. Those supporters include Wall Street luminaries like Stanley Druckenmiller, Henry Kravis and Cliff Asness, who — for now — is hosting a fund-raiser for Haley’s campaign on Jan. 30. And Silicon Valley investor Tim Draper plans to host an event for Haley. Next month in California.
But representatives of well-known donors, including Ken Griffin and Paul Singer, are scheduled to meet soon in Palm Beach, Florida, to discuss whether to support Haley. A bad investment keeps growingAccording to Puck.
Haley already seems to be running out of some money. LinkedIn co-founder and Democrat Reid Hoffman, who donated $250,000 to a super PAC running for the former governor of South Carolina, has decided close his walletAccording to CNBC.
How long can Haley’s campaign last? According to some political analysts, possibly in marchBecause the staunch anti-Trump camp, like the Koch family’s political machinery, is publicly standing with them.
Meanwhile, businesses are trying to map out a new Trump administration there are certain certaintiesIn addition to more trade wars, Trump has proposed 10 percent tariffs across the board on imports — and a light touch on regulation, according to the Wall Street Journal’s Greg Ip.
What corporate leaders may fear most is whether a Trump 2.0 administration is motivated by personal animosity, including moving Jay Powell into a more comfortable chair at the top of the Fed and taking revenge on perceived enemies.
Leasing a SPAC
The boom in SPACs, publicly traded shell companies that briefly became The practice of taking companies public ended years ago. New rules approved by the SEC will make it harder for them to achieve that kind of popularity.
SEC requires SPACs to provide more information to investors, take measures Wednesday effectively closing those vehicles with traditional IPOs (SPACs, which merge with privately held companies and give those businesses their own stock ticker), long criticized for inadequate transparency on fees and other matters. hai) make like.
“Just because a company uses an alternative method to go public does not mean its investors are less deserving of time-tested investor protections,” gary genslerThe SEC chairman said in a statement.
SPACs surged in 2020 and 2021, Amidst the market turmoil, which also led to the rise of meme stocks and cryptocurrencies. more than 860 SPACs raised $246 billion During this period, according to research provider SPACInsider.
But since then interest in them has waned. The number of SPACs has declined over the past two years, partly because investors have become wary of potential new regulations.
Longtime skeptics applauded the new rules. Senator Elizabeth Warren, Democrat of Massachusetts, has argued that they benefited wealthy financiers and market insiders at the expense of retail investors. “Wall Street insiders create and abuse SPACs to rig the market and line their own pockets, guaranteeing themselves huge returns even if their questionable investments fail,” he told DealBook.
Defenders of SPACs said it would make it harder for some companies to go public. These include the SEC’s two Republican commissioners, who voted against the new rules. “In the long term, this could result in fewer opportunities for companies to access our public markets and fewer opportunities for people to invest,” he said. mark uedaOne of those who disagreed.
best among the rest
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