Tag Archives: leasing

Arizona AG announces $35 million settlement with leasing company – 12news.com KPNX

  1. Arizona AG announces $35 million settlement with leasing company 12news.com KPNX
  2. Nevada announces $35 million settlement with leasing company KOLO
  3. CFPB Orders Leasing Company Tempoe to Provide $36 Million in Penalties and Relief for Tricking Consumers and Hiding Contract Terms Consumer Financial Protection Bureau
  4. ‘Predatory’ leasing company Tempoe shut down after settlement with Pennsylvania, dozens of other states CBS Pittsburgh
  5. Attorney General Henry announces settlement with leasing company WTAJ – www.wtaj.com
  6. View Full Coverage on Google News

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Just 2 Customers Ditched Tesla Since Musk Bought Twitter: Leasing CEO

  • Elon Musk’s Twitter troubles have had minimal impact on Tesla sales at Octopus EV, its CEO said.
  • Just two customers decided to change makes, Fiona Howarth told the Financial Times.
  • Musk has become an increasingly polarizing figure since his takeover of Twitter last October.

Elon Musk has become increasingly controversial since taking over Twitter last October, but specialist leasing firm Octopus EV says there’s little evidence that his conduct has affected its sales of Tesla cars.

Just two of Octopus EV’s Tesla customers — out of “well over 1,000” — switched to another make last year over  Musk’s decisions at Twitter, its CEO Fiona Howarth told the Financial Times.

While small, she said the dip was still worth noting, given how loyal Tesla customers have usually been. 

Three longtime Tesla owners recently told Insider that they’re ditching their cars over Musk’s actions at Twitter. 

Bob Perkowitz, a self-described former fanboy, said he hasn’t bought a new Tesla because of Elon Musk’s apparent right-wing views, his tumultuous Twitter acquisition, and his radical emphasis on free speech — which he fears will allow misinformation to spread more widely online. 

Investors in Tesla shares have also been voting with their feet in recent months. The stock was trading at its lowest level since August 2020 on Friday, leading one investor to question whether Musk was deliberately tanking the carmaker.

But it’s not all down to Twitter. Tesla also fell victim to broader slumps in demand for electric vehicles last year, particularly in China — one of its largest markets. The company closed the year by offering discounts as prices for used Teslas plummeted.

Musk’s net worth fell by $200 billion in 2022, per Bloomberg, in the biggest and fastest individual loss on record. 

Octopus EV, Tesla, and Musk did not immediately respond to requests for comment from Insider.

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Apple, Amazon, McDonald’s Headline Busy Earnings Week

Amazon.

com Inc.,

Apple Inc.

and

Meta Platforms Inc.

are among the tech heavyweights featured in a packed week of earnings that investors will probe for indicators about the broader economy.

Other tech companies scheduled to report their latest quarterly reports include Google parent company

Alphabet Inc.

and

Microsoft Corp.

Investors also will hear from airlines such as

Southwest Airlines Co.

and

JetBlue Airways Corp.

, automotive companies

General Motors Co.

and

Ford Motor Co.

, and energy giants

Chevron Corp.

and

Exxon

Mobil Corp.

Nearly a third of the S&P 500, or 161 companies, are slated to report earnings in the coming week, according to FactSet. Twelve bellwethers from the Dow Jones Industrial Average, including

Boeing Co.

and

McDonald’s

Corp., are expected to report as well.

The flurry of results from a broad set of companies will give a sense of how businesses are faring as they deal with inflation denting consumer spending, ongoing supply-chain challenges and a stronger dollar.

People awaited the release of Apple’s latest iPhones in New York last month. The company will report quarterly results on Thursday afternoon.



Photo:

ANDREW KELLY/REUTERS

One area holding up to the challenges has been travel. Several airline companies have reported that consumers still have an appetite to spend on trips and vacations. On Friday,

American Express Co.

raised its outlook for the year in part because of a surge in travel spending.

“We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year,” American Express Chief Executive

Stephen Squeri

said.

In addition to airlines reporting, companies such as car-rental company

Hertz Global Holdings Inc.

and lodging companies

Hilton Worldwide Holdings Inc.

and

Wyndham Hotels & Resorts Inc.

will offer reads into leisure spending.

Overall, earnings for the S&P 500 companies are on track to rise 1.5% this period compared with a year ago, while revenue is projected to grow 8.5%, FactSet said.

Other companies will serve as a gauge for how consumers have responded to higher prices and whether they have altered their spending as a result.

Coca-Cola Co.

and

Kimberly-Clark Corp.

on Tuesday and

Kraft Heinz Co.

on Wednesday will show how consumers are digesting higher prices.

Mattel Inc.,

set to report on Tuesday, will highlight whether demand for toys remains resilient. Rival

Hasbro Inc.

issued a warning ahead of the holiday season.

United Parcel Service Inc.

will release its results on Tuesday and provide an opportunity to show how it is faring ahead of the busy shipping season. The Atlanta-based carrier’s earnings come weeks after rival

FedEx Corp.

warned of a looming global recession and outlined plans to raise shipping rates across most of its services in January to contend with a global slowdown in business.

Results from credit-card companies

Visa Inc.

and

Mastercard Inc.

will offer insights into whether inflation has finally put a dent in consumer spending after both companies reported resilient numbers last quarter.

Wireless carrier

T-Mobile US Inc.’s

numbers on Thursday will give more context to mixed results from competitors

Verizon Communications Inc.

and

AT&T Inc.

AT&T

issued an upbeat outlook on Thursday after its core wireless business exceeded the company’s expectations, whereas Verizon on Friday said earnings tumbled as retail customers balked at recent price increases.

Other notable companies lined up to report include

Chipotle Mexican Grill Inc.

on Tuesday, chicken giant

Pilgrim’s Pride Corp.

on Wednesday and chip maker

Intel Corp.

on Thursday.

Write to Denny Jacob at denny.jacob@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Lyft Lays Off About 60 Employees, Folds Its Car Rentals for Riders

Lyft Inc.

has shed about 60 people while hitting the brakes on renting its cars to riders and consolidating its global operations team, according to people familiar with the matter and an employee memo reviewed by The Wall Street Journal.

The cuts covered less than 2% of staff and mainly affected employees who worked in operations, the people said. In a memo to some staff sent Tuesday, the company said it was folding the part of its business that allowed consumers to rent its fleet of cars on the app.

“Our road to scaling first party rentals is long and challenging with significant uncertainty,” according to the memo, sent by Cal Lankton, vice president of fleet and global operations at Lyft. Mr. Lankton wrote that conversations about exiting the business started last fall and “then accelerated as the economy made the business case unworkable.”

Lyft shares rose around 8% Wednesday to close at $14.70, while the tech-heavy Nasdaq Composite Index climbed less than 2%.

The company said it is going to continue working with big car-rental companies. Lyft’s car-rental business had five locations while it has car-rental partnerships with

Sixt

SE and

Hertz Global Holdings Inc.

in more than 30 locations, a spokeswoman said.

“This decision will ensure we continue to have national coverage and offer riders a more seamless booking experience,” the spokeswoman said in a statement.

The company also is reorganizing its global operations team, consolidating from 13 to nine regions and closing a location in Northern California and its Detroit hub, according to the memo.

Lyft joins other tech companies that are trimming staff or scaling back hiring plans as economic challenges cool the once-hot sector. The industry has been hiring at a rapid pace for years, but easy money is drying up and share prices have been plunging amid the reversal of some pandemic trends, high inflation, supply-chain shortages and growing worries about an economic slowdown.

Lyft’s stock has fallen more than 70% in the past 12 months compared with the less than 20% decline in the Nasdaq Composite Index.

In May, rival Uber Technologies Inc. said it would slow hiring. Its stock has halved over the same period.

Last week, Alphabet Inc.’s Google said it will slow hiring for the rest of the year while Microsoft Corp. cut a small percentage of its staff, attributing the layoffs to regular adjustments at the start of its fiscal year. Rapid-delivery startup Gopuff cut 10% of its staff last week, citing growing concerns about the economy.

Earlier this month,

Facebook

-parent Meta Platforms Inc.’s head of engineering told managers to identify and push out low-performing employees, according to an internal post. Snap Inc. Chief Executive

Evan Spiegel

recently told staff the company would slow hiring, warning that the economy “has definitely deteriorated further and faster than we expected.”

In May, Lyft President

John Zimmer

said in a staff memo the company planned to slow hiring, reduce the budgets of some of its departments and grant new stock options to some employees to make up for its eroding share price. At the time, Mr. Zimmer said the company didn’t plan to cut staff.

After enduring the pandemic, ride-share companies like Uber and Lyft are now facing a new world of high inflation, driver shortages, and dwindling passenger numbers. WSJ’s George Downs explains what they’re doing to try and survive. Illustration: George Downs

Write to Preetika Rana at preetika.rana@wsj.com and Emily Glazer at emily.glazer@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Biden releases five-year offshore leasing plan Friday

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President Biden’s administration opened the door Friday to more offshore oil and gas drilling in federal waters over the next five years, setting a potential course for future U.S. fossil fuel extraction just a day after suffering a major climate setback at the Supreme Court.

The proposed program for offshore drilling between 2023 and 2028 would ban exploration off the Atlantic and Pacific coasts. But by leaving the possibility for new drilling in parts of the Gulf of Mexico and off the coast of Alaska, the announcement falls short of Biden’s campaign promise to end federal fossil fuel leasing for good.

The plan may move the country further from its pledge to slash the nation’s planet-warming pollution in half by 2030 compared with 2005 levels, and help avert even fiercer fires, storms and drought driven by rising temperatures. Biden’s climate agenda now hinges on whether Democrats can pass a reconciliation package in the Senate that includes robust environmental policies.

“The Supreme Court just put a lead ball around his ankle with regard to his executive authority,” said John Podesta, a former chief of staff to President Bill Clinton and a former senior adviser to President Barack Obama. “If you don’t get reconciliation, together with the constraints that the Supreme Court has put on, I think there’s no way you can get the 50 percent reduction by the end of the decade.”

But the offshore plan, along with other events this week, underscores the political and legal limits in the United States to tackle global warming, and carries risks for Democrats as Americans experience record-breaking gasoline prices ahead of November’s midterm election and as many in Biden’s base demand stricter limits on fossil fuels.

On Thursday, the conservative majority on the Supreme Court struck a blow to the Environmental Protection Agency’s ability to force power providers to stop burning coal. And Biden’s Interior Department was compelled by an injunction from a lower court to lease acreage in the Western United States this week for onshore drilling.

The consequences of warming 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared with preindustrial levels by continuing to burn other fossil fuels are enormous for humanity: If left unchecked, global warming may stall headway on combating hunger, poverty and disease worldwide. The International Energy Agency has urged halting investment in new fossil fuel supplies to meet that goal.

“We’re going to be slowing down the progress that we otherwise might be making,” said Brian O’Neill, a chief scientist at the Joint Global Change Research Institute and a lead author on a U.N. Intergovernmental Panel on Climate Change report on impacts and vulnerability.

The Interior Department is considering 10 potential auctions in the Gulf of Mexico and one in Alaska’s Cook Inlet. Interior Secretary Deb Haaland emphasized that the plan has not been finalized and that her department is considering the option of having no lease sales at all. The plan narrows areas considered for oil and gas leasing from one proposed under President Donald Trump in 2018.

“A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development,” Haaland said in a statement. “From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy.”

During his bid for the White House, Biden vowed to ban new oil and gas drilling across federal lands and waters. “No more drilling on federal lands, period,” he said at a campaign event in New Hampshire. “Period, period, period.”

In the Senate, there is growing optimism that Senate Majority Leader Charles E. Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.), who effectively ended negotiations over a previous iteration of a sweeping package, can strike a deal.

Since December, when Manchin blocked Biden’s original Build Back Better proposal, the senator has expressed reservations about the price tag of any potential package, warning about the rising national debt and skyrocketing inflation. But with only 50 seats in the Senate, the party needs Manchin’s vote to pass any legislation. As a result, party leaders have relented and cut many of their domestic priorities from the proposed package.

Energy policy, though, is still expected to remain a centerpiece of the potential bill, as Manchin has long called for protecting the United States’ energy security and increasing its energy independence from foreign nations. But aides say negotiations over what the energy and climate components of the deal would look like are still underway and final decisions are probably weeks away.

In a statement Friday, Manchin said he was “pleased” the plan had come out, though he was “disappointed to see that ‘zero’ lease sales is even an option on the table.”

“Our leasing programs are a critical component of American energy security,” Manchin said. “I hope the administration will ultimately greenlight a plan that will expand domestic energy production, done in the cleanest way possible, while also taking the necessary steps to get our offshore leasing program back on track to give the necessary market signals to provide price relief for every American.”

Environmentalists and other Democratic lawmakers expressed their frustration with Biden considering any new offshore leases, given the risks posed by climate change and oil spills, while the industry representatives agitated for more auctions to lessen reliance on foreign energy.

“Holding any new offshore oil and gas lease sales over the next five years is a lose-lose for Americans,” Rep. Raúl M. Grijalva (D-Ariz.), who chairs the House Natural Resources Committee, said in a statement. “It will do nothing to help lower prices at the pump, and it will make our emissions goals virtually impossible to achieve.”

“It’s hugely important to recognize that the Biden administration has the discretion to propose a five-year leasing program that does not provide for any new lease sales,” said Drew Caputo, vice president of litigation for lands, wildlife and oceans at Earthjustice, an environmental law firm.

Industry officials called the proposal too restrictive.

“Today’s announcement sends more mixed signals from the administration and is another punch in the gut to consumers and businesses suffering from high energy prices and inflation,” said Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute.

Federal law requires Interior to release a plan for new offshore oil and gas lease sales every five years, but the law gives the administration broad discretion. Biden officials said the crafting of the plan was fraught.

It came out as the administration struggles to chart its next steps on climate, given Thursday’s Supreme Court ruling. Biden officials said that while they had largely expected to lose the case, senior aides remain shocked and demoralized as they reckon with the limits on their ability to combat climate change. They conceded that there is a sense of despondency pervasive throughout the offices working on climate policy.

Gina McCarthy, Biden’s national climate adviser who crafted the EPA rule at the center of the Supreme Court case, has emphasized in recent days that the administration is focused on finding alternative ways, particularly through the Defense Production Act, to continue to meet their climate goals.

“His use of the Defense Production Act to accelerate all this domestic production is really, I think, going to be one of the ways in which this president makes it clear to people that he is going to keep driving the change that’s necessary,” McCarthy said in a recent interview with The Washington Post, referring to Biden’s push to make rare earth minerals available for the electrical vehicle market.

And the Rhodium Group, an independent research firm, said the administration can still achieve its climate targets despite the Supreme Court’s ruling.

Biden’s efforts to curtail fossil fuel drilling, however, have faced serious legal and political setbacks.

Soon after taking office, he followed up with an executive order instructing Interior to pause all new lease sales on public lands and waters while it reviewed how to adjust the program. A federal judge in Louisiana last year blocked that pause.

Republican lawmakers and oil industry lobbyists have urged the administration to boost America’s fossil fuel production to help curb record prices at the pump. The national average for a gallon of gasoline hit $4.84 Friday, according to AAA, up by more than 50 percent this year.

“If the administration is serious about reducing prices at the pump, they should be expanding access to oil and natural gas on federal lands, not killing it,” Sen. John Barrasso (Wyo.), the top Republican on the Senate Energy and Natural Resources Committee, said in a recent statement.

It takes about five to 10 years to start producing oil from a new offshore lease, according to the Interior Department. That means the proposal issued Friday will have little immediate impact on current prices at the pump — though it could have significant implications for the United States’ ability to meet its pledge to cut emissions by 2030 at least in half compared to 2005 levels.

Biden administration officials privately acknowledge that soaring fuel prices could imperil congressional Democrats’ chances in November’s midterm elections. They have taken several steps to lower gas prices that are anathema to climate activists, such as authorizing a historically large release from the Strategic Petroleum Reserve.

The western and central portion of the Gulf of Mexico makes up the heart of the U.S. offshore energy business, where about 1.7 million barrels of oil are extracted a day mainly off the coast of Texas, Louisiana, Mississippi and Alabama and piped to refineries to be turned into gasoline, jet fuel and plastics.

Energy companies have worked for years to drill for oil and gas well beyond the Gulf, off the East and West coasts. But those hopes dimmed in 2010 when a rig boring an offshore exploratory well exploded and led to the deaths of 11 crewmen, setting off the worst marine oil spill in U.S. history.

The Deepwater Horizon disaster killed hundreds of thousands of birds, uncorked millions of barrels of oil into the ocean and stymied efforts to expand offshore oil exploration in the United States.

After the spill, President Barack Obama halted plans to expand drilling to parts of the eastern Gulf, near Florida, as well as along the East Coast. His successor, Donald Trump, sought to expand drilling up and down the Atlantic and Pacific coasts, only to retreat after governors in both parties from Maine to Florida opposed the plan.

Even energy industry representatives concede there won’t be drilling soon in the Atlantic or Pacific.

“We understand, politically, there’s not going to be production there, potentially for a long time,” said Erik Milito, president of the National Ocean Industries Association, which represents offshore oil, gas and wind firms.

The Biden administration’s ability to carry out the president’s vow to stop new drilling is also being tested ashore, across hundreds of millions of acres managed by federal government out West.

Interior’s Bureau of Land Management netted $22 million by offering about 130,000 acres for drilling across seven states this week. Immediately, a coalition of environmental groups sued to stop the administration, urging it to find a way to forestall auctions despite facing a court order.

“Overwhelming scientific evidence shows us that burning fossil fuels from existing leases on federal lands is incompatible with a livable climate,” Melissa Hornbein, senior attorney with the Western Environmental Law Center, said in a statement.

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Buybacks Hit Record After Pulling Back in 2020

Stock buybacks are back.

Companies in the S&P 500 repurchased $234.5 billion in shares during the third quarter, topping the previous record of $223 billion in the fourth quarter of 2018, according to preliminary data from S&P Dow Jones Indices. The wave of share repurchases has helped propel U.S. stock indexes to dozens of records in 2021. The S&P 500 is up 25% this year, notching 67 record closes.

More buybacks are coming. Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said he projects that S&P 500 buybacks will reach $236 billion in the fourth quarter.

S&P 500 component

Microsoft Corp.

said in September that its board had approved a plan to repurchase up to $60 billion of its stock. Car-rental company

Hertz Global Holdings Inc.

recently said it would buy back as much as $2 billion of its stock, while tech company

Dell Technologies Inc.

is planning a $5 billion share-repurchase program. 

Buybacks are just one of the forces behind the stock market’s rally. Asset prices have continued to benefit from the monetary and fiscal support that policy makers put in place to help the economy get through the pandemic. And analysts have consistently underestimated corporate earnings, which are expected to grow 45% in 2021 for companies in the S&P 500. 

Investors this week will scrutinize signals out of the Federal Reserve’s two-day policy meeting, where officials may accelerate the process of winding down a bond-buying stimulus program. Central-bank officials could also shed more light on their expectations for interest-rate increases next year.

Microsoft has approved the repurchase of up to $60 billion of its stock. Its HoloLens headset.



Photo:

Thanassis Stavrakis/Associated Press

S&P 500 buybacks plunged from nearly $199 billion in the first quarter of 2020 to just under $89 billion in the second, as companies reeling from the onset of the pandemic moved to conserve cash. Share repurchases increased in each following quarter, approaching $199 billion again in the second quarter of 2021.

Repurchases can support stocks by reducing a company’s share count, boosting its per-share profits. And they can boost investor sentiment by suggesting executives are optimistic about their companies’ prospects and confident in their financial position.

“It’s always comforting to have a management team come in and tell you how undervalued they think their shares are,” said

Anne Wickland,

a portfolio manager at Easterly Investment Partners. “It’s a vote of confidence in the longer-term outlook.” 

Her team bought shares of

Lockheed Martin Corp.

in the summer, in part because of the defense company’s share-buyback program and dividend yield. Lockheed shares fell 12% on Oct. 26 after the company reported lower-than-expected quarterly sales and revised its full-year sales forecast lower. Ms. Wickland said she believes the shares are undervalued and continues to like them.

Stock buybacks have come under fire from politicians who say companies should use cash to invest in their businesses instead of supporting their share prices. The version of the $2 trillion education, healthcare and climate spending package that passed the House in November would ​​create a 1% tax on the net value of a company’s stock buybacks. 

SHARE YOUR THOUGHTS

What is your reaction to this latest streak of stock buybacks? Join the conversation below.

The Senate hasn’t voted yet, but the buyback tax has so far generated less corporate opposition than the bill’s other tax increases. Strategists at BofA Global Research project that the proposed tax would result in a 0.3% reduction to S&P 500 per-share earnings, assuming that companies didn’t change the amount of stock they repurchase. 

Several investors said they don’t believe the tax would have much of an effect on companies’ behavior if it became law. “The 1% tax on buybacks is so low that I don’t think it will impact anything,” said

Olivier Sarfati,

head of equities at wealth-management firm GenTrust.

Write to Karen Langley at karen.langley@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Interior Department releases long-awaited review of federal oil and gas leasing program

The report, which Biden commissioned last January, outlines a series of primarily fiscal reforms for the federal oil and gas program, which Interior said currently “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”

Environmental groups expressed concerns about the review and called for more urgent action to be taken to address the climate crisis.

“These trivial changes are nearly meaningless in the midst of this climate emergency, and they break Biden’s campaign promise to stop new oil and gas leasing on public lands,” said Randi Spivak, public lands director at the Center for Biological Diversity. “Greenlighting more fossil fuel extraction, then pretending it’s OK by nudging up royalty rates, is like rearranging deck chairs on the Titanic. There’s no time left for baby steps that let the fossil-fuel industry wreak even greater havoc on the Earth.”

“We urge the Biden administration to build on this report by phasing out new oil and gas leasing altogether,” said Athan Manuel, director of the Sierra Club’s Lands Protection Program, “and we call on Congress to include these reforms in the final Build Back Better Act to ensure that our public lands are part of the climate solution, instead of enriching oil company CEOs at the public’s expense.”

The report comes as the Biden administration has faced criticism from some environmental advocates for moving forward with reopening millions of acres in the Gulf of Mexico to auction for drilling. The auction is at odds with Biden’s climate agenda — the President has promised to slash greenhouse gas emissions in half by 2030 — and environmental advocates said it could set US climate goals back for years.
The administration tried in its first days in office to put a stop to new oil and gas drilling. Biden’s January order paused new leases and directed the Interior Department to launch a comprehensive review of existing programs related to fossil fuel development. But a lawsuit filed in March on behalf of 13 states led to a judgment that blocked Biden’s pause, and the administration is appealing that decision.

“The Interior Department has an obligation to responsibly manage our public lands and waters — providing a fair return to the taxpayer and mitigating worsening climate impacts — while staying steadfast in the pursuit of environmental justice,” Interior Secretary Deb Haaland said in a statement Friday. “This review outlines significant deficiencies in the federal oil and gas programs, and identifies important and urgent fiscal and programmatic reforms that will benefit the American people.”

The review notes that the federal oil and gas program’s fiscal components are “particularly outdated, with royalty rates that have not been raised for 100 years.”

“Consideration should be given to raising royalty rates and, to the extent allowed by statute, to increasing the current minimum levels for bids, rents, royalties, and bonds,” the report states.

The review also encourages congressional action “on pending legislation to provide fundamental reforms to the onshore and offshore oil and gas programs.”

While the leasing program review outlines a “set of important and long overdue reforms,” House Natural Resources Chair Raúl Grijalva underscored the need for more permanent solutions.

“The administration needs to manage public lands and waters consistent with its climate commitments, and today’s report does not offer a plan to do that,” Grijalva said in a statement. “What it does offer is a set of important and long overdue reforms to the federal fossil fuel leasing program, which until now has been a public subsidy for oil and gas drilling and extraction.”

“We need new industry financial requirements and greater public transparency around leasing, and the administration should start making these welcome changes as soon as possible,” the Arizona Democrat added.

“Congress needs to end wasteful subsidies and advance leasing reform bills while that’s happening because every American sees climate change all around them, and we all know that impermanent policy changes at the margins won’t reduce emissions enough to protect our quality of life.”

Friday’s report also follows Biden’s announcement earlier this week to release emergency oil reserves to combat high energy prices ahead of the busy holiday travel season.

The administration could have chosen to increase domestic oil production, but the White House has been wary of the optics of the President and his aides pushing for more drilling at home on the heels of the major UN climate summit COP26, where Biden promised that the US would “lead by example” on clean energy initiatives.

This story has been updated with more details and background.

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Tesla Stock Is Dropping. Here’s What’s Really Behind the Slide.

Tesla shares are dropping. Recalls and uncertainty could be responsible. A third reason, however, is most likely.


Joe Raedle/Getty Images

Text size


Tesla

stock can’t go up forever, and finally turned lower on Tuesday. Reports of recalls and uncertainty about the company’s deal with Hertz are two potential reasons, but a third factor may be the real key.

Tesla (ticker: TSLA) stock was down 1.6% in morning trading, following a slump of as much as 5% before the open. The


S&P 500

and


Dow Jones Industrial Average

were up 0.3% and 0.2%, respectively.

Tesla stock has been on a tear. It has risen eight of the past nine trading sessions, and has gained 70% over the past three months. Its shares have been buoyed by signs that the company really has won the EV race, signing a deal with Hertz (HTZ) for 100,000 electric vehicles. Companies such as


Ford

Motor (F) and


General Motors

(GM) have announced enormous spending plans to try to close the gap.

No surprise, then, that the stock would react badly to potentially negative headlines. First, Musk himself tweeted that Tesla had yet to sign a contract with


Hertz

(HTZZ). Then came the announcement that the company would be recalling 11,700 vehicles.

The Musk tweet, however, was intended as a positive. The Hertz deal is Tesla’s first large fleet sale. Fleet sales tend to be lower-margin. Fleet buyers look for volume discounts and don’t often buy all the high-end options individual consumers do.

Musk has assured investors, on


Twitter

(TWTR), a couple of times that Tesla is selling all the cars it can make and isn’t giving any discounts these days.

Hertz shares initially took a hit because of the tweet, starting off with a loss of about 6% in premarket trading. But nothing happens in a vacuum.

Hertz’s peer


Avis Budget

(CAR) reported better-than-expected results Monday evening, sending the stock up about 1% in premarket trading, despite year-to-date gains of about 360%. Rental-car demand and operating metrics are improving.

In late morning trading, it looked as if meme traders were squeezing short sellers, as they did with


GameStop

stock at the start of the year. Avis stock was up 162% to $450 a share, bringing Hertz is along for the ride with a gain of about 16%.

For Tesla stock, the recall might be a bigger deal than the status of the sale to Hertz. The cars are being recalled because of a software-communication error that can activate automatic emergency braking. The fix is an over-the-air software update. Tesla has faced more regulator scrutiny over driver-assistance features in recent months.

What’s more, Tesla recently introduced a “beta” version of its latest full-self-driving software to Tesla drivers who qualified for the upgrade. Tesla believes its software makes vehicles safer. Regulators, however, still need to adjust to cars being improved by software updates and how to handle changes made to software to fix bugs.

Any news, however, could have sparked a selloff in Tesla stock. The stock is extremely overbought, which is to say that it is rising quickly relative to its own history. When things get extreme, stocks can revert to the mean. Tesla’s relative strength reading is at 94. A reading of 50 is, essentially, normal and levels of above 70 generally have traders looking for a drop.

Coming into Tuesday, Tesla stock has outperformed the S&P 500 by about 77 percentage points over the past 100 days, as Datatrek Research pointed out in a Tuesday note. That’s a lot, but not unheard of for Tesla.

“Crazy as it sounds, the stock’s recent rally is pretty normal action for this name,” the research outfit said. With outperformance like that, investors don’t really need an excuse to take profits.

Tesla stock has a long way to go before it will look ripe for a hit.

Write to Ben Levisohn at ben.levisohn@barrons.com

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GE Nears Deal to Combine Aircraft-Leasing Unit With AerCap

General Electric Co. is nearing a $30 billion-plus deal to combine its aircraft-leasing business with Ireland’s

AerCap

AER 1.62%

Holdings NV, according to people familiar with the matter, the latest in a string of moves by the industrial conglomerate to restructure its once-sprawling operations.

Though details of how the deal would be structured couldn’t be learned, it is expected to have a valuation of more than $30 billion, some of the people said. An announcement is expected Monday, assuming the talks don’t fall apart.

The

GE

GE 0.29%

unit, known as GE Capital Aviation Services, or Gecas, is the biggest remaining piece of GE Capital, a once-sprawling lending operation that rivaled the biggest U.S. banks but nearly sank the company during the 2008 financial crisis. GE already took a major step back from the lending business in 2015 when it said it would exit the bulk of GE Capital, and a deal for Gecas would represent another big move in that direction.

It would also represent another significant move by GE Chief Executive Larry Culp to right the course of a company that has been battered in recent years by souring prospects for some of its top business lines and a structure that has fallen out of favor with investors.

With more than 1,600 aircraft owned or on order, Gecas is one of the world’s biggest jet-leasing companies, alongside AerCap and Los Angeles-based Air Lease Corp. It leases passenger aircraft made by Boeing Co. and

Airbus SE

as well as regional jets and cargo planes to customers ranging from flagship airlines to startups. Gecas had $35.86 billion in assets as of Dec. 31.

AerCap has a market value of $6.5 billion and an enterprise value—adjusted for debt and cash—of about $34 billion, according to S&P Capital IQ, and around 1,400 owned or ordered aircraft. The company has experience in deal making, paying around $7.6 billion in 2014 to buy International Lease Finance Corp. AerCap’s revenue last year was about $4.4 billion, down from around $5 billion in the previous few years.

The aviation business has been hit hard by the Covid-19 pandemic, which has resulted in a sharp drop in global travel and prompted airlines to ground planes. Some airlines have sought to defer lease payments or purchases of new aircraft. Gecas had an operating loss of $786 million on revenue of $3.95 billion in 2020. GE took a roughly $500 million write-down on the value of its aircraft portfolio in the fourth quarter.

Combining the companies could afford cost-cutting opportunities and help the new entity weather the downturn.

Separating Gecas could help GE with its efforts to shore up its balance sheet and improve cash flows. Despite a recent increase, GE’s share price remains below where it was before significant problems in the company’s power and finance units emerged in recent years.

The Boston company has a market value of around $119 billion after the shares more than doubled in the past six months as it posted improving results. Still, the stock has fallen by about three-quarters from the peak just over 20 years ago.

Mr. Culp became the first CEO from outside of GE in late 2018 after the company was forced to slash its dividend and sell off businesses. The former

Danaher Corp.

boss has sought to simplify GE’s wide-ranging conglomerate structure further, as other industrial giants such as Siemens AG and

Honeywell International Inc.

have done in recent years.

Activist investor Trian Fund Management LP, which has owned a significant position in the company since 2015 and holds a seat on its board, has supported such changes.

Early in his tenure, Mr. Culp said he had no plans to sell Gecas, a move his predecessor

John Flannery

had considered after the unit drew interest from private-equity firms pushing further into the leasing business.

Mr. Culp has sought to even out cash flows and refocus on core areas. Operations he has parted with include the company’s biotech business, which was purchased by Danaher in a $21 billion deal that closed last year. GE also sold its iconic lightbulb business in a much smaller deal last year, and previously said it was unloading its majority stake in oil-field-services firm Baker Hughes Co.

GE has cut overhead costs and jobs in its jet-engine unit while streamlining its power business. The pandemic continues to pressure the jet-engine business, GE’s largest division, however.

The company also makes healthcare machines and power-generating equipment, and the rest of GE Capital extends loans to help customers purchase its machines and contains legacy insurance assets too.

AerCap is based in Ireland and Gecas has headquarters there as well. The aircraft-leasing industry has long had a significant presence in Ireland due to the country’s favorable tax regime and the importance of Guinness Peat Aviation in the development of the sector. (A deal between GE and AerCap would reunite two companies that bought their main assets from GPA.) The industry has gotten more competitive as Chinese companies have gained market share, however, and the combination could help the new group stem that tide.

Shares in aircraft-leasing companies plummeted along with much of the market in the early days of the pandemic as demand from major airlines, who lease planes to avoid the costs of owning them, evaporated. But many of the major lessors’ stocks have recovered lost ground and then some in the months since as lockdowns ease and the outlook for travel improves.

AerCap’s Chief Executive Aengus Kelly said on its fourth-quarter earnings call this month that he expects airlines to shift more toward leasing planes as they rebuild their balance sheets, in what would be a boon to the company and its peers.

“Their appetite for deploying large amounts of scarce capital to aircraft purchases will remain muted for some time,” he said. “The priority will be to repay debt or government subsidies.”

Write to Cara Lombardo at cara.lombardo@wsj.com and Emily Glazer at emily.glazer@wsj.com

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