Tag Archives: Automobiles

Business

Tesla is not alone: 18 (and a half) other big stocks are headed for their worst year on record

Leave a comment

In the worst year for stocks since the Great Recession, several big names are headed for their worst year on record with just one trading day left in 2022.

The S&P 500 index
SPX,
+1.75%
and Dow Jones Industrial Average
DJIA,
+1.05%
are both headed for their worst year since 2008, with declines of 20.6% and 9.5% respectively through Thursday. But at least 19 big-name stocks — and half of another — are headed for a more ignominious title for 2022, according to Dow Jones Market Data: Worst year ever.

Tesla Inc.
TSLA,
+8.08%
is having the worst year among the group of S&P 1500 constituents with a market capitalization of $30 billion or higher headed for record annual percentage declines. Tesla shares have declined 65.4% so far this year, which would be easily the worst year on record for the popular stock, which has only had one previous negative year since going public in 2010, an 11% decline in 2016.

Tesla may not be the worst decliner on the list by the time 2023 arrives, however, as another Silicon Valley company is right on its heels. Meta Platforms Inc.
META,
+4.01%,
the parent company of Facebook, has fallen 64.2% so far this year, as Chief Executive Mark Zuckerberg has stuck to spending billions to develop the “metaverse” even as the online-advertising industry that provides the bulk of his revenue has stagnated. It would also only be the second year in Facebook’s history that the stock has declined, after a 25.7% drop in 2018, though shares did end Facebook’s IPO year of 2012 30% lower than the original IPO price.

Only one other stock could contend with Tesla and Meta’s record declines this year, and Tesla CEO Elon Musk has some familiarity with that company as well. PayPal Holdings Inc.
PYPL,
+4.46%,
where Musk first found fame during the dot-com boom, has declined 63.2% so far this year as executives have refocused the company on attracting and retaining high-value users instead of trying to get as many users as possible on the payments platform. It would be the second consecutive down year for PayPal, which had not experienced that before 2021 since spinning off from eBay Inc.
EBAY,
+4.76%
in 2015.

None of the other companies headed for their worst year yet stand to lose more than half their value this year, though Charter Communications Inc.
CHTR,
+1.99%
is close. The telecommunications company’s stock has declined 48.2% so far, as investors worry about plans to spend big in 2023 in an attempt to turn around declining internet-subscriber numbers.

In addition to the list below, Alphabet Inc.’s class C shares
GOOG,
+2.88%
are having their worst year on record with a 38.4% decline. MarketWatch is not including that on the list, however, as Alphabet’s class A shares
GOOGL,
+2.82%
fell 55.5% in 2008; the separate class of nonvoting shares was created in 2012 to allow the company — then still called Google — to continue issuing shares to employees without diluting the control of co-founders Sergey Brin and Larry Page.

Apart from that portion of Alphabet’s shares, here are the 19 large stocks headed for their worst year ever, based on Thursday’s closing prices.

Company % decline in 2022
Tesla Inc.
TSLA,
+8.08% 		65.4%
Meta Platforms Inc.
META,
+4.01% 		64.2%
PayPal Holdings Inc.
PYPL,
+4.46% 		62.6%
Charter Communications Inc. 48.0%
Edwards Lifesciences Corp.
EW,
+2.87% 		41.9%
ServiceNow Inc.
NOW,
+3.67% 		39.9%
Zoetis Inc.
ZTS,
+3.00% 		39.3%
Fidelity National Information Services Inc.
FIS,
+2.03% 		37.8%
Accenture PLC
ACN,
+2.00% 		35.3%
Fortinet Inc.
FTNT,
+2.82% 		31.5%
Estee Lauder Cos. Inc.
EL,
+1.52% 		32.5%
Moderna Inc.
MRNA,
+1.34% 		29.6%
Iqvia Holdings Inc.
IQV,
+2.94% 		26.3%
Carrier Global Corp.
CARR,
+2.17% 		22.8%
Hilton Worldwide Holdings Inc.
HLT,
+1.63% 		19.2%
Broadcom Inc.
AVGO,
+2.37% 		16.2%
Arista Networks Inc.
ANET,
+2.27% 		15.2%
Dow Inc.
DOW,
+1.32% 		10.7%
Otis Worldwide Corp.
OTIS,
+2.16% 		9.2%

Read original article here

Business

Opinion: Tesla investors have been the biggest losers in Elon Musk’s Twitter deal, and those losses continue

Leave a comment

Twitter users have complained a lot about Elon Musk’s early moves after taking control of the social network, but their complaints seem tiny compared with what Tesla Inc. investors have had to suffer.

As the U.S. focused on election returns Tuesday evening, Tesla
TSLA,
-7.17%
Chief Executive Musk tried to slip through disclosure of his long-awaited stock sales, revealing that he had sold nearly $4 billion of Tesla stock in the previous three trading sessions. Musk did not publicly address the stock sales nor his intentions to sell more within 24 hours of the disclosure, even while tweeting roughly 20 times in that period.

[MarketWatch asked him on Twitter to address the sales twice, and did not receive a reply; Tesla disbanded its media-relations department years ago.]

The sales fueled a further downturn in shares of the electric-vehicle maker on Wednesday, when the stock fell 7.2% to $177.59, its lowest closing price since November 2020. Tesla is currently down 49.6% on the year, which would be far and away the worst year yet for the stock — the previous record annual decline was 2016, when it fell 11%.

The problems for Tesla investors go far beyond Musk selling its stock so that he could overpay for a company with limited growth prospects and a host of other problems, but the poor optics certainly start there.

“He sold caviar to buy a $2 slice of pizza,” said Dan Ives, a Wedbush Securities analyst.

Ives was one of several on Wall Street to predict Musk would need to sell more shares to either close a gap in his financing of the $44 billion deal to buy the social-media company, or provide additional operating funds. In a telephone conversation Wednesday, he said the Twitter move is “a nightmare that just won’t end for Tesla investors.”

One reason it isn’t ending is that Musk’s need for cash in relation to Twitter is not done with the recent sales, portending more in the future. Musk said in a tweet late last week that Twitter had a “massive drop in revenue” due to activists pressuring advertisers to pull their ads, and he will have to continue paying the employees he did not lay off while servicing a debt load that analysts have estimated will cost him $1 billion a year, much more than Twitter has cleared in profit in the past two years. Twitter reported a net loss of $221 million in 2021, and a net loss of $1.13 billion for 2020.

Read more about Elon Musk potentially pumping Tesla stock ahead of a sale

“The first two weeks of ownership have been a ‘Friday the 13th‘ horror show,” Ives said, adding that the verification plan and mass layoffs of 50% of employees — and then trying to rehire some of the engineers, developers and cybersecurity experts — was “really stupid.” And, according to CNBC, Musk has also pulled more than 50 Tesla engineers, many from the Autopilot team, to work at Twitter.

“But it’s consistent with how this thing has been handled,” Ives said, adding that Musk is “way over his skis” with the Twitter acquisition.

Amid all the chaos of his first two weeks running Twitter, how much time has Musk had to run his other companies? Musk was already splitting his Tesla time with SpaceX, The Boring Company, Neuralink and many other endeavors, and now he has taken on the gargantuan task of turning a social-media company that has never been highly profitable, nor valuable, into something worth the $44 billion he paid.

The effort, Ives said, has “tarnished his brand,” which in turn has a big risk of hurting Tesla. Many investors have bought into the Tesla story because they believe Musk is a genius and they back his vision of electrifying the automotive industry. Twitter does not meld into that vision, except as a platform to spout his opinions, vitriol and promote more wacky concepts.

Since Musk began his quest to buy the company, he has endured more criticism than ever before, with even some fans starting to throw shade or question his decisions. Investor Gary Black, managing partner of the Future Fund LLC, for example, pointed out that Tesla’s top engineers should not be running Twitter, where the news was getting worse.

Tesla is not a company that can just run itself at this point. Musk has claimed he did not want to be chief executive but that there was no one else to take over the car company, which is why he has served as CEO for years. It’s not clear, though, how much effort he actually has made at trying to recruit someone. Now, as Tesla faces its usual multitude of issues, he is off spending his time trying to turn Twitter into a payments company, or maybe a subscription company, or maybe an “everything app,” or whatever he comes up with tomorrow.

“Musk needs to look in the mirror and end this constant merry-go-round of Twitter overhang on the Tesla story, with his focus back on the golden child Tesla, which needs his time more than ever given the soft macro, production/delivery issues in China, and EV competition increasing from all corners of the globe,” Ives wrote in a note Wednesday, in which he reiterated an outperform rating on Tesla stock.

For Twitter to reach anywhere close to the valuation Musk paid for it, it’s going to need a ton of attention from a focused leader, but how can Musk be that leader and give Tesla the attention it deserves? The answer is he cannot, and is very likely to give the attention that Tesla needs to Twitter instead after committing $44 billion (not all of it his) to that endeavor. Tesla investors will be left staring at the sea of red that this year has wrought, and wondering if its leader is about to sell more shares to fund his other effort.



Read original article here

Business

Opinion: Elon Musk pumps Tesla stock with ridiculous $4 trillion target. Is a dump coming next?

Leave a comment

Another Tesla Inc. earnings call, and another fanciful Elon Musk prediction that likely encouraged yet another open file at the Securities and Exchange Commission on Wednesday.

The chief executive of Tesla Inc.
TSLA,
+0.84%
told investors Wednesday that he believes the valuation of the electric-car maker will exceed the combined market capitalization of the two most valuable companies in the world: Apple Inc.
AAPL,
+0.08%
and Saudi Arabian Oil Co.
2222,
+0.42%.

“I am of the opinion that we can far exceed Apple’s current market cap,” Musk said. “In fact, I see a potential path for Tesla to be worth more than Apple and Saudi Aramco combined.”

Based on Wednesday’s closing prices, the combined market capitalization of those two companies is about $4.4 trillion U.S. dollars. But at least he added a caveat — “That doesn’t mean it will happen or that it will be easy, in fact it will be very difficult, require a lot of work, very creative new products, expansion and always good luck.”

Full earnings coverage: Elon Musk teases massive Tesla stock buyback as CFO trims forecast for annual deliveries and stock falls

This type of outrageous prediction is not new for Musk. He already predicted that Tesla would be worth as much as Apple, and its market cap now is roughly the same size as Apple’s was then, though his explanation for why Tesla would spike to that level was way off.

The situation Musk is in right now, though, is new. As the soap opera that has erupted from his deal to buy Twitter Inc.
TWTR,
+0.10%
draws to a close, he is believed to need somewhere between $5 billion and $8 billion to finish off that deal, as our colleagues at Barron’s recently reported, and his only real avenue to that kind of cash is to sell Tesla stock.

Musk was precluded from selling shares before Tesla’s earnings report due to SEC rules, so what better way to try and pump Tesla’s stock before that blackout ended than to make some far-out predictions on the company’s earnings call?

From Barron’s: A Tesla stock sale is coming. We know who, why and when, but not how much.

A $4 trillion-plus price target wasn’t the only eye-opening claim Musk made in Wednesday’s call. He also told investors that he expected Tesla to perform the first stock buyback in its corporate history next year, and a large one at that: $5 billion to $10 billion.

“Even in a downside scenario next year, given next year is very difficult, we still have the ability to do a $5 [billion] to $10 billion buyback. This is obviously pending board review and approval,” he said. “So it’s likely that we will do some meaningful buyback.”

It is very odd to announce a share repurchase plan before it is approved and officially put in place by a board of directors, though sharing the news early is not automatically a violation of securities laws, said Stephen Diamond, an associate professor at Santa Clara University School of Law.

“Best practices would suggest waiting until you have your ducks in a row before making such an announcement, but I doubt it creates any obvious legal problems,” he said.

He added that the Tesla board is likely seeking approval from its auditors and legal counsel for the share repurchase, which would be why it isn’t approved yet.

“There is an accounting test under Delaware law that the company must meet in order to buy back shares,” Diamond said in an email. “Generally, it can only buy back shares if there is a ‘surplus’ available. To assess that would require support from their internal finance team to the board and likely as well outside opinions from their auditors and legal counsel.” 

While early disclosure of buyback plans would not register alarms at the SEC office automatically, these types of pronouncements from Musk specifically will perk up some ears at the regulator’s offices. Musk has already faced recriminations from the agency for earlier statements, and been targeted for failing to live up to the settlement he agreed to in that case. Musk is also reportedly actively being investigated for his behavior as he moved to acquire Twitter, which Twitter seemed to confirm in a legal filing earlier this month.

More: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

On the call, Musk would only say that he is “excited about the Twitter situation,” while admitting that “myself and the other investors are obviously overpaying for it right now.”

Tesla officials did not respond to a request for comment or answer a question about whether Musk does need to sell more Tesla shares to complete the Twitter deal.

The question for Tesla investors, though, is whether they have overpaid for Tesla stock before another round of stock sales from Musk, who has already offloaded billions in shares in the past year, which reportedly resulted in yet another SEC inquiry. On Wednesday, though, shares fell more than 6% in after-hours trading despite the chief executive’s boosterism, which seemed to be overshadowed by a revenue miss and trimmed forecast.

Perhaps investors are finally seeing through Musk’s earnings-call bloviating that boosted the value of Tesla’s shares in the past. But if Musk sells Tesla shares in the coming days after trying to talk up the company’s value, it won’t be the investors who knock on his door, it might be the SEC yet again.

Read original article here

Business

He nailed three big S&P 500 moves this year. Here’s where this strategist sees stocks headed next, with beaten down names to buy.

Leave a comment

A Wall Street hat trick may not be on the cards, with stocks in the red for Wednesday.

A two-day rally was never a guaranteed exit out of the bear woods anyway, as some say signs of a durable bottom are still missing.

Enter our call of the day, from the chief market technician at TheoTrade, Jeffrey Bierman, who has made a string of prescient calls on what has been a roller coaster year for the index thus far. He’s also a professor of finance at Loyola University Chicago and DePaul University.

Bierman, who uses quant and fundamental analysis to determine market direction, sees the S&P 500
SPX,
-1.62%
finishing the year between 4,000 and 4,200, maybe around 4,135. “Fourth-quarter seasonality favors bulls following a weak third quarter.  Not to mention most stocks are priced for no growth,” he told MarketWatch in a Monday interview.

In December 2021, he forecast the S&P 500 might see a 20% decline within six months, toward 3,900 — it hit 3,930 in early May. In June, he forecast a rally and recovery to 4,300 — the index hit 4,315 by mid-August.

Speaking to MarketWatch on Aug. 25, Bierman saw a retest of around 3,600 for the index, citing an often rough September for stocks. It closed out last month at a new 2022 low of 3,585.

“I think we’re going to end up for the quarter. [The market is] deeply oversold and some stocks are completely mispriced in terms of their valuation metrics,” said Bierman, who is looking squarely at retail and technology sectors.

“The valuations on half the chip stocks are trading below a multiple of seven. I’ve never seen that ever…but what that means is when the semiconductor sector comes back, the multiple expansion is gonna be like a volcanic eruption to the upside,” he said of the sector known for its boom/bust cycles.

For example, he owns Intel
INTC,
-2.53%,
which hit a five-year low on Friday. Eventually, the company that has invested $20 billion in a new U.S. plant will come roaring back alongside rivals like Advanced Micro
AMD,
-4.65%.
“People will look back on this and go ‘Oh, my God, I can’t believe Intel was at five times earnings,’ which is insanity for this stock.”

For the S&P 500 as a whole next twelve months price/earnings is currently 16.13 times, so Intel’s would be less than half of the broader index, according to FactSet

As for retail, he’s been looking at Urban Outfitters
URBN,
-1.06%,
Macy’s
M,
-1.94%
and Nordstrom
JWN,
-0.67%,
all places where millennials don’t shop, but the middle class does, with the all-important holiday shopping period dead ahead.

“There are 100,000 people being hired to work part time at these companies, and their margins are not coming down at all,” with no markdowns and decent sales, he said, noting those companies are being priced at a multiple of 5 times forward earnings.

“It means that you don’t think that Macy’s can put together for the Christmas quarter a comparative quarter, year over year of greater than 5%? If you don’t then don’t buy it, but I do,” said Bierman. “That’s why I’m willing to stick my neck out and buy these things. I bought Abercrombie & Fitch
ANF,
-3.78%
at 10 times earnings…I’ve never seen it that low.”

For those who aren’t comfortable picking stocks, he says they can still get exposure through exchange-traded funds, such as SPDR S&P Retail
XRT,
-2.58%
or the Technology Select Sector SPDR ETF
XLK,
-1.70%.

Bierman adds that investors need to be careful not to be overly concentrated in the top stocks, given “10 stocks accounted for 45% of the Nasdaq and the fact that 25% of the S&P almost accounted for about 50% of the S&P movement.”

“Everbody’s concentrated in 10 stocks that can still fall another 30% or 40%, like Apple and Microsoft. The idea of concentration risk is that everybody owns Apple, everybody owns Amazon,” he said.

And that could force the hand of passive and active managers heavily invested in those big names, driving a 10% drop for markets that “washes away all other stocks.”

The markets

Stocks
DJIA,
-1.21%

SPX,
-1.62%

COMP,
-2.19%
are in the red, and bond yields
TMUBMUSD10Y,
3.783%

TMUBMUSD02Y,
4.199%
are up, along with the dollar
DXYN,
.
Silver
SI00,
-5.00%
is retracing some of this week’s big gains, and bitcoin
BTCUSD,
-2.62%
is also off, trading at just over $20,000. Hong Kong stocks
HSI,
+5.90%
surged 6% in a catch-up move following a holiday. New Zealand’s central bank hiked rates a half point, the fifth increase in a row.

The buzz

Oil prices
CL.1,
-0.02%

BRN00,
+0.28%
are flat as OPEC+ reportedly agreed to cut oil production by 2 million barrels a day. Some say don’t be too impressed by any output reduction.

Amazon
AMZN,
-2.34%
will reportedly freeze corporate hires in its retail business for the remainder of 2022.

Mortgage applications fell to the lowest pace in 25 years in the latest week.

The ADP private-sector payrolls report showed 208,000 jobs added in September. The trade deficit narrowed, which should be good news for third-quarter GDP. The Institute for Supply Management’s services index is due at 10 a.m. Atlanta Fed President Raphael Bostic will also speak.

Expect the spotlight to stay on Twitter
TWTR,
-2.53%
after Tesla
TSLA,
-5.16%
CEO Elon Musk committed to the $44 billion deal. But will it feel like a win once he owns it?

Plus: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

EU countries agreed to impose new sanctions on Russia after the illegal annexation of four Ukraine regions. Those moves will include an expected price cap on Russian oil.

South Korea’s missile fired in response to North Korea’s weapon launch over Japan, crashed and burned.

Best of the web

Russians fleeing Putin’s mobilization are finding haven in poor, remote countries.

Consumers are throwing away perfectly good food because of ‘best before’ labels.

The CEO of an election software company has been arrested on accusations of ID theft.

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern:

Ticker Security name
TSLA,
-5.16% 		Tesla
GME,
-7.59% 		GameStop
AMC,
-9.56% 		AMC Entertainment
TWTR,
-2.53% 		Twitter
NIO,
-5.92% 		NIO
AAPL,
-1.77% 		Apple
APE,
-8.40% 		AMC Entertainment preferred shares
BBBY,
-8.52% 		Bed Bath & Beyond
AMZN,
-2.34% 		Amazon
DWAC,
-0.64% 		Digital World Acquisition Corp.
The chart

More market-bottom talk:


Twitter

Random reads

All about the investment manager who caught Yankees’ superstar Aaron Judge’s record-breaking home run.

An iPhone in a 162-year old painting? The internet is stumped.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton

Read original article here

Business

Ford stock drops more than 4% as supply costs to jump by $1 billion, parts shortages to leave more cars unfinished

Leave a comment

Ford Motor Co. shares dropped more than 4% in the extended session Monday after the company said inflation and parts shortages will leave it with more unfinished vehicles than it had expected, reminding Wall Street supply-chain snags are far from over for auto makers.

Ford
F,
+1.43%
said it expects to have between 40,000 and 45,000 vehicles in inventory at the end of the third quarter “lacking certain parts presently in short supply.”

The auto maker also said that based on its recent negotiations, payments to suppliers will run about $1 billion higher than expected for the quarter, thanks to inflation. The company reaffirmed its outlook for the year, however.

Ford’s warning “is evidence that auto parts shortages and supply-chain issues are still ongoing,” CFRA analyst Garrett Nelson told MarketWatch.

Many investors had started to believe “these problems were in the rearview mirror with inventories starting to recover from the record lows of the last year or so,” Nelson said.

The unfinished vehicles include high-demand, high-margin models of popular trucks and SUVs, Ford said. That will cause some shipments and revenue to shift to the fourth quarter.

“Ironically, Ford may have become a victim of its own success in that its recent U.S. sales growth has outperformed peers by a wide margin,” Nelson said. Its third-quarter production “apparently wasn’t able to keep pace with demand.”

Ford reiterated expectations of full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion, despite the shortages and the higher payments to suppliers, it said.

Ford called for third-quarter adjusted EBIT of between $1.4 billion and $1.7 billion.

Shares of Ford ended the regular trading day up 1.4%. The company has embarked on a reorganization to pivot to electric vehicles, and last month confirmed layoffs in connection with its new structure.

Ford is slated to report third-quarter financial results on Oct. 26, when it said it expects to “provide more dimension about expectations for full-year performance.”

Analysts polled by FactSet expect the auto maker to report adjusted earnings of 51 cents a share, which would match the third-quarter 2021 adjusted EPS, on revenue of $38.8 billion.

The quarterly sales would compare with $35.7 billion in revenue in the year-ago period.

Shares of Ford slid 4.4% after hours, and have lost 28% so far this year, compared with losses of 18% for the S&P 500 index
SPX,
+0.69%.

The news comes a week after FedEx Corp.
FDX,
+1.17%
roiled markets and raised fears of an economic slowdown by withdrawing its outlook for the year and warning that the year was likely to become worse for the business.

Read original article here

Business

Ray Dalio says watch out for rates reaching this level, because Wall Street stocks will take a 20% hit

Leave a comment

After that CPI shock earlier in the week, Wall Street is fielding a fresh batch of data on Thursday, with the headline retail sales number coming in stronger than expected. And a disastrous rail strike may be inverted.

But there’s no cheering up billionaire investor and hedge-fund manager Ray Dalio who in our call of the day asserts the Fed has no choice but to keep driving up interest rates, at a high price to stocks.

And he’s putting some fairly precise guesswork out there. “I estimate that a rise in rates from where they are to about 4.5% will produce about a 20% negative impact on equity prices,” Dalio said in a LinkedIn post dated Tuesday.

Some are forecasting the Fed could hike interest rates by 100 basis points next week, a move not seen since the likewise inflationary 80s. The central bank’s short-term rate hovers between 2.25% to 2.5%, but Nomura, for one, sees that rate headed to 4.75% by 2023.

But Dalio thinks interest rates could even reach the higher end of a 4.5%-to-6% range. “This will bring private sector credit growth down, which will bring private sector spending, and hence the economy down with it,” he says.

Behind this prediction is the Bridgewater Associates founder belief that the market is severely underestimating where inflation will end up — at 2.6% over the next 10 years versus what he sees as 4.5% to 5% in the medium term, barring shocks.

Read: Why a single U.S. inflation report roiled global financial markets — and what comes next

As for what happens when people start losing money in the markets — the so-called “wealth effect” — he expects less spending as they and their lenders grow more cautious.

“The upshot is that it looks likely to me that the inflation rate will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, that other markets will go down, and that the economy will be weaker than expected, and that is without consideration given to the worsening trends in internal and external conflicts and their effects.”

The markets

Stock futures
ES00,
-0.25%

YM00,
+0.02%

NQ00,
-0.48%
are slightly lower post data, as Treasury yields
TMUBMUSD10Y,
3.437%

TMUBMUSD02Y,
3.852%
keep climbinging and the dollar
DXY,
-0.10%
firms up.

Oil prices
CL.1,
-1.63%
are lower, along with gold
GC00,
-0.83%.
China stocks
SHCOMP,
-1.16%

HSI,
+0.44%
slipped after the country’s central bank left rates unchanged. European natural-gas prices
GWM00,
+4.13%
are on the rise again. Bitcoin
BTCUSD,
+0.64%
is trading at just over $20,000.

The buzz

Shares of Union Pacific
UNP,
-3.69%,
Norfolk Southern 
NSC,
-2.16%
and CSX
CSX,
-1.05%
 are rallying in premarket after the White House said it has reached a tentative railway agreement with unions. No deal by Friday would mean strikes and havoc for supply chains, grain markets and even the coming holidays. Read more here.

August retail sales rose a stronger-than-expected 0.3% as Americans spent on new cars while weekly jobless claims came in lower for a fifth-straight week and import prices dropped 1%. Elsewhere, the Empire State manufacturing index perked up on the heels of a deep negative reading, but the Philly Fed factory index worsened. Industrial production and business inventories are still to come.

Adobe shares
ADBE,
+0.85%
are dropping after a report the software company is mulling a $20 billion deal to buy graphic design startup Figma .

Vitalik Buterin, one of the co-founders of Ethereum, says the so-called “merge” is done, meaning the birth of a more environmentally friendly crypto. Ethereum
ETHUSD,
-1.22%
is up just a little right now.

A new lawsuit claims Tesla
TSLA,
+3.59%
has made false promises over Autopilot and Full Self Driving features. And move over Tesla, Apple
AAPL,
+0.96%
is now Wall Street’s biggest short bet.

Ericsson
ERIC,
-3.32%

ERIC.A,
-1.78%

ERIC.B,
-3.34%
is dropping after a double downgrade at Credit Suisse, who cited inflationary headwinds. Analysts lifted Nokia
NOKIA,
-0.51%

NOK,
-0.40%
to outperform, though the stock is barely moving.

Cathie Wood’s Ark Investment Management went on a dip-buying spree after Tuesday’s market meltdown, scooping up chiefly Roku
ROKU,
+0.44%.

Opinion: Pinterest never considered itself a social network. Until now.

Patagonia billionaire Yvon Chouinard is donating his entire company — worth $3 billion — to the climate fight.

Best of the web

No U.S. shale rescue for Europe.

Turkey finds an extra $24.4 billion laying around.

Queue to pay respects to Queen is 2.6 miles long and counting.

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern Time:

Ticker Security name
TSLA,
+3.59% 		Tesla
GME,
+1.01% 		GameStop
AMC,
+1.95% 		AMC Entertainment
BBBY,
+4.66% 		Bed Bath & Beyond
HKD,
+311.78% 		AMTD Digital
NIO,
-0.14% 		NIO
AAPL,
+0.96% 		Apple
APE,
+0.94% 		AMC Entertainment preferred shares
AMZN,
+1.36% 		Amazon
NVDA,
-0.02% 		Nvidia
Random reads

Scientists try to teach robots comedic timing

Sausage, mozzarella, batter. Meet South Korea’s hot dog.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Read original article here

Business

Kia and Hyundai vehicles across America are being stolen in seconds

Leave a comment

It can take as little as under a minute to steal some Hyundai and Kia models, and it’s happening all across the country.

Why it matters: The widespread problem is attributed to design flaws in the cars, forcing owners to resort — for now — to an old-fashioned steering wheel lock if they want to keep their vehicles safe.

  • Hyundai is telling customers that if they want a specialized security kit to protect their vehicle, they’ll need to pay for it.
  • The equipment, a “starter interrupt and siren” that “targets the method of entry thieves are using,” will be available starting Oct. 1 for Hyundai vehicles at an undisclosed cost, Hyundai said in a statement.
  • Kia says it is not offering a security kit at this time.

How it works: Thieves bust a window and remove part of the steering column’s cover, exposing the ignition. They break the ignition cylinder off and start the vehicle with a flathead screwdriver or USB plug-in.

  • They’re “just the perfect size to put in the opening,” Sam Hussein, president of Metrotech Automotive Group auto repair in Dearborn, Mich., tells Axios.
  • The method works on 2011-2021 Kias and 2016-2021 Hyundais that use a steel key, not a fob and push-button start. They are targeting cars that lack engine immobilizers — devices that don’t allow the car to start without the correct smart key present, per the automakers.
  • Damage can run between $2,000-$3,000, Hussein estimates. And getting the car back may take a while, he says, as some parts are on backorder due to the increased demand.

The intrigue: Officials link some of the thefts to a trend shown in a viral YouTube video in Milwaukee that interviews members of the so-called “Kia Boys.” They demonstrate how they purportedly steal the cars so quickly.

State of play: Some areas say Kias and Hyundais are disappearing in greater numbers this summer, including the Midwest, where a Kia spokesperson tells Axios the problem is most prominent.

  • Detroit had 111 Kias stolen in July and 22 in the first nine days of August, per its police department. That’s up from 23 in June and 11 or fewer in all previous months of 2022.
  • Charlotte, N.C., police report 156 Kia and Hyundai thefts since June 20, a 346% increase from 35 incidents in the same timeframe last year.
  • Per the NICB’s 2021 Hot Wheels report, seven of the top 10 most stolen vehicles in Wisconsin were Kias or Hyundais. But none of those vehicles made the top 10 in the state in the 2020 report.

Meanwhile, the automakers are getting sued across the country, including a two-plaintiff class-action suit in Iowa, a class-action in Wisconsin and two class-action suits centering Ohio theft victims, per court records and law firms.

  • Car owners allege a failure to disclose design defects that make the cars easy to steal. Now, despite admitting the problem, the companies still “refuse to fix them” or “compensate consumers,” the Iowa suit reads.

  • “Offering [a security kit] and then charging them to install it is not acceptable,” Jeffrey Goldenberg, an attorney in a five-plaintiff suit of mostly Ohio residents filed earlier this month, tells Axios.

What they’re saying: Hyundai Motor Co., the parent company to both the Hyundai and Kia brands, is aware its cars “have been targeted in a coordinated effort on social media,” a statement provided to Axios says.

  • Hyundai added that all its vehicles “meet or exceed Federal Motor Vehicle Safety Standards.” Cars being produced now all have the immobilizers that make them tougher to steal.

Worth noting: The “Kia Boys” influence is far from ubiquitous. Officials in Houston, Austin, Salt Lake City and Richmond, Va., tell Axios reporters they aren’t seeing this trend.

Zoom in: Richard Eldredge reported his 2019 Kia Soul stolen from the parking lot of his Midtown Atlanta apartment building on July 7, he tells Axios. The car was discovered the next day, damaged. He’s now waiting on parts due to the supply-chain logjam.

  • “Who on Earth would have thought that a dad-ride like a Kia Soul would have been targeted by teenagers?” the Atlanta journalist and senior editor at VOX ATL said.
  • “It’s [because it’s] a social media trend and it’s easy to do. Lamborghinis are a little tougher to rip off.”

Axios Local’s Everett Cook edited this story, and Kim Bojórquez, Joe Guillen, Jay Jordan, Joann Muller, Karri Peifer, Asher Price, Katie Peralta Soloff and Thomas Wheatley contributed.

Sign up for Axios Local, now publishing daily newsletters in 24 cities across the U.S.

Read original article here

Business

Elon Musk says he’s buying Manchester United — but if it’s a joke, the SEC is unlikely to laugh

Leave a comment

Last Updated: Aug. 16, 2022 at 9:27 p.m. ET

First Published: Aug. 16, 2022 at 9:09 p.m. ET

Elon Musk is either getting into international soccer or else may have scored an own goal and teed up more trouble from the SEC.

In a tweet late Tuesday, the Tesla Inc. TSLA chief executive said: “Also, I’m buying Manchester United ur welcome,” referring to the iconic English soccer club that may be up for sale.

It was unclear if Musk was…

Elon Musk is either getting into international soccer or else may have scored an own goal and teed up more trouble from the SEC.

In a tweet late Tuesday, the Tesla Inc.

TSLA

chief executive said: “Also, I’m buying Manchester United ur welcome,” referring to the iconic English soccer club that may be up for sale.

It was unclear if Musk was serious, as he’s well-known for tweeting jokes and frivolous statements.

Neither Manchester United nor the SEC immediately replied to requests for further information.

But if it was a joke, it may not be funny to the Securities and Exchange Commission, since Manchester United

MANU

is a publicly traded company. Musk’s tweet came at 8:01 p.m., just after the end of after-hours trading, so Man U’s stock was unaffected.

Musk is no stranger to tweets coming back to bite him. His 2018 tweet that he had “funding secured” to consider taking Tesla private at $420 a share became the subject of regulatory action by the SEC, ultimately resulting in $20 million fines each against Musk and Tesla.

Musk has sparred with the SEC on a number of other occasions over the years. He’s also embroiled in a bitter legal battle as he’s trying to pull out of a $44 billion deal to buy Twitter Inc.

TWTR

.

On the other hand, if the tweet is true, it would be a seismic deal for one of the most valuable sports brands on the planet. Manchester United’s current owners, the Glazer family, have been under pressure to sell the team after years of underperformance, mismanagement and a revolt by some fans. The team is currently in last place in the English Premier League, after their second straight loss to start the season, an embarrassing 4-0 defeat to Brentford on Saturday.

Last week, reports said British businessman Michael Knighton planned a formal bid to buy the team. The club has an estimated value of $4.6 billion, according to Forbes.

That price tag would be doable for Musk, who is the world’s wealthiest individual, with a fortune estimated around $267 billion, according to the Bloomberg Billionaires Index.

Manchester United went public in a 2012 IPO on the New York Stock Exchange. Its shares are down 10% year to date, in line with the S&P 500’s


SPX

10% loss this year.



Read original article here

Business

Tesla investors pave way for stock split, vote with company on most proposals

Leave a comment

Tesla Inc. shareholders on Thursday approved a proposal expected to lead to a 3-for-1 stock split and sided with the company on most of the proposals up for a vote.

Tesla
TSLA,
+0.40%
announced preliminary vote results at its gigafactory in Austin, its new corporate headquarters, at the end of an official shareholder meeting that was followed by a speech and question-and-answer session with Chief Executive Elon Musk.

The electric-car maker said the stock split, its second in two years, would provide its employees with more flexibility and make the stock more accessible to retail investors. Tesla performed a 5-for-1 stock split in August 2020, and its shares have increased 31% since then. They closed Thursday at $925.90, up 0.4%.

See: Tesla files for 3-for-1 stock split

With a goal of producing 20 million vehicles a year, Musk said an announcement about a new factory location could come later this year, and said Tesla could ultimately have 10 to 12 factories around the world. It currently has four, in Fremont, Calif.; Austin, Texas; Shanghai and Berlin.

Shareholders also approved the re-election of two board members despite being urged against it by proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services.

Martin Viecha, head of investor relations for Tesla, announced that the company proposals to reduce director terms to two years from three years, and to remove the supermajority voting requirement for proposals, had been approved by investors but failed to hit the two-thirds threshold of total shares outstanding needed to make the votes official. In addition, a shareholder proposal for shareholder proxy access passed, he said. It would give shareholders the ability to nominate board members.

See: Influential proxy advisory firms urge against voting for Tesla board members, for most shareholder proposals

Seven other shareholder proposals failed, according to the preliminary results. They included calls for reports on antiharassment and discrimination efforts, and on mandatory arbitration. Shareholders had also urged Tesla to adopt a policy on freedom of association and collective bargaining.

The company expects to file a final tally of the shareholder votes within four business days, as required, Viecha said.

Read original article here

Business

Elon Musk’s response to Twitter lawsuit to be made public by Friday

Leave a comment

DOVER, Del. — Elon Musk’s answer to Twitter’s lawsuit over his attempt to back out of a $44 billion deal to buy the social media company will be made public by Friday evening at the latest, a judge ruled Wednesday.

Attorneys for Musk wanted to file a public version of their answer and counterclaims in Delaware court Wednesday. But Twitter
TWTR,
+0.05%
attorneys complained that they needed more time to review and potentially redact Musk’s sealed filing, saying it refers “extensively” to internal Twitter information and data given to Musk.

Chancellor Kathaleen St. Jude McCormick held a quick teleconference Wednesday before agreeing with Twitter, directing that the public filing be docketed by 5 p.m. Friday. It could be filed earlier depending on when Twitter attorneys complete their review.

Twitter attorneys argued that court rules require that five business days lapse before a public version of Musk’s filing is docketed.

“Few cases attract as much public interest as this one, and Twitter is mindful of this court’s commitment to ensuring maximum public access to its proceedings,” Twitter attorney Kevin Shannon wrote. “Twitter has no interest in proposing any more redactions to defendants’ responsive pleading than are necessary.”

Musk attorney Edward Micheletti argued that Twitter’s lawyers were misinterpreting the court rules. Musk attorneys also say there is no confidential information in Musk’s filing that should be withheld from the public.

“Twitter should not be permitted to continue burying the side of the story it does not want publicly disclosed,” Micheletti wrote.

Musk, the world’s richest man, agreed in April to buy Twitter and take it private, offering $54.20 a share and vowing to loosen the company’s policing of content and to root out fake accounts.

Twitter shares closed Wednesday at $41, well off a 52-week high of $69.81.

Musk, indicated in July that he wanted to back away from the deal, prompting Twitter to file a lawsuit to hold him to the “seller-friendly” agreement.

Musk says Twitter has failed to provide him enough information about the number of fake accounts on its service. Twitter argues that Musk, CEO of electric car maker and solar energy company Tesla Inc.
TSLA,
+2.27%,
is deliberately trying to tank the deal because market conditions have deteriorated and the acquisition no longer serves his interests.

Either Musk or Twitter would be entitled to a $1 billion breakup fee if the other party is found responsible for the agreement failing. Twitter wants more, however, and is seeking a court order of “specific performance” directing Musk to follow through with the deal.

Read original article here