An e-zine that keeps you informed on the hottest trends on Wall Street, provides you with the key information to make you filthy rich (*your results may vary)
by Joseph Hargett | April 21, 2022
I’ve been dazed and confused by Tesla’s (Nasdaq: TSLA) earnings for so long, it’s not true. Wanted an EV maker, never bargained for you…
Umm, what was so confusing about Tesla’s report?
Well … nothing. That’s the most surprising part, if you’ve tuned into literally any other quarterly report from the Big Red T.
Throughout Tesla’s time in the earnings confessional last night, there was no Elon-related lunacy. No Musky memes. No attention-seeking shenanigans clouding Tesla’s quarterly financials — for once.
For all intensive porpoises, Tesla reported a completely normal report. And what a banger of a report it was!
Tesla ended up beating estimates across the board. Vehicle deliveries are at record levels, bringing automotive revenue up 87% year over year.
Total revenue hit $18.8 billion on the quarter, beating expectations by about $1 billion and notching a new sales record. Even earnings per share came in at a record $3.22, topping analysts’ expectations for just $2.26.
In fact, Tesla was so bullish that it offered giddy levels of guidance. While the company didn’t give exact expectations for future vehicle deliveries, Musk and co. still expect 50% to 60% growth in vehicle production compared to 2021.
It’s a bold claim considering Tesla still faces the threat of plant closures, with the Shanghai factory just now resuming production “at limited levels.” But when have Musk’s bold claims ever not come to fruition?
I hope you’re being sarcastic…
Me? Be sarcastic? Why, I never!
I just want to know: How’d Tesla do it? How did the Musk Man pull off such an impressive beat, all the while improving Tesla’s margins?
I mean, prices for everything are skyrocketing, let alone prices for battery materials. The mix of metals that goes into your typical EV battery was 70% more expensive last quarter than in the quarter prior.
It’s simple: Tesla just started using a different blend of battery materials.
Half of the Teslas shipped last quarter use “LFP batteries” — lithium-ion batteries without the more expensive cobalt or nickel of other batteries. Tesla claims these LFP batteries still have the same range as other Tesla batteries, while also bringing down the total cost per car.
Wait, was this about building better batteries the whole time?
Welcome to the show! This is what everyone from Great Stuff to Charles Mizrahi to Paul have been talking about for … well, ever since we started talking about EV batteries in the first place.
For TSLA shareholders, this report is the stuff of dreams. A double beat and raise rally? Don’t mind if I do!
So … what’s the catch? After following Musk’s misadventures for years now (willingly or less than willingly), part of me has to wonder when the other shoe is gonna drop. Why is Elon playing close to the vest all of a sudden?
Is it — oh, right. Of course it had to be Twitter (NYSE: TWTR).
With all that boring, corporate earnings business stuff out of the way, Elon can now refocus his attention-grabbing antics on, you guessed it, buying Twitter.
Tesla’s outstanding yet business-as-usual report was still hot off the virtual presses when, this morning, news broke that Mr. Musk is thinking about a tender offer to outright buy TWTR shareholders’ stakes.
According to the filings, Elon has the likes of Morgan Stanley, Bank of America, Barclays and others ready to provide $46.5 billion in funding.
Are you saying funding’s … secured?
Sigh. Yes, yes indeed. But with Twitter poison-pilling itself instead of negotiating with Elon, this offer is unlikely to get anywhere. Try again next week, bucko.
So where are we at the end of all this hubbub?
For Tesla investors, the only real threat you have to worry about is your CEO’s attention slipping more and more over to the Twitter-sphere. It didn’t work for Jack Dorsey, and it won’t work for Musk.
Otherwise? Tesla’s business is in primo shape — and you could do with a few more “boring” reports like this one.
For Twitter investors … maybe you’ll have your shares bought for a premium price when Elon tries this routine again for the umpteenth time.
For the rest of you? Well, check out the other other thing that Elon Musk is obsessed with right now:
Musk, Dalio and Cuban are all loading up on this one crypto coin. It’s called the Next Gen Coin, and the financial elite say it could be 20X bigger than bitcoin.
Mark Cuban proclaimed this coin “will dwarf bitcoin.” Billionaire hedge fund manager Ken Griffin said it’s “superior to bitcoin and will eventually replace it.” That’s because, as this presentation explains, this coin has the ability to “power the rails of global finance.”
As you’ll see in this special interview, crypto expert Ian King reveals the full details on this coin … and why you should invest before the upgrade date. Click here to see more…
As if Amazon (Nasdaq: AMZN) needed another feather in its already-cosmic cap, the e-commerce giant apparently fancies itself the new FedEx (NYSE: FDX) of the shipping fulfillment world.
In the wee-early hours of the morning, Amazon announced that it would pimp out its delivery services to “Buy with Prime” members. Buy with what now?
Essentially, “Buy with Prime” is a new feature that lets third-party merchants use Amazon’s enormous shipping and logistics network normally reserved for Prime customers.
Sellers can piggyback off Prime’s expedited shipping and even put Prime badges on their websites to let users know they participate in the program.
But as with all things Amazon, the feature doesn’t come free for sellers.
The new service is available by invitation only for now — and pricing will vary depending on payment processing, fulfillment needs, storage and other fees. One can only imagine how quickly those “other fees” could stack up…
Very similar to how Amazon Web Services started, vice president of Amazon Prime Jamil Ghani hopes “Buy with Prime” grows into a tool to help third parties leverage their own businesses with ultra-fast shipping.
The move also puts an enormous amount of pressure on competitors FedEx and UPS (NYSE: UPS), which have been at war with Amazon’s shipping services for years now.
So … basically, Amazon’s just doing Amazon things again? Taking over the whole world and whatnot?
You better believe it! Thanks again, Bezos.
Carvana (NYSE: CVNA) just can’t seem to capture that pre-pandemic car-buying profitability it so desperately craves.
The company just posted a loss of $260 million this last quarter, or $2.89 per share, making last year’s $36 million loss look like peanuts.
Thing is, used-car demand doesn’t seem to be Carvana’s main problem. While revenue hit the skids this quarter, Carvana still managed to sell 105,185 cars to retail customers in the new year. That’s up 14% from the same quarter in 2021.
So, what gives?
Does it start with “i” and end in “flation?”
Right you are, Great Ones! Carvana said rising interest rates and an uptick in used-car prices were partially to blame for this quarter’s revenue quagmire.
Adding to the pain, Carvana preps its used-car capacity six to 12 months in advance — meaning it planned for this year’s inventory volume without budgeting for inflation and is now paying the price.
Looking to the future, Carvana said it isn’t providing any “specific numeric near-term guidance” for the rest of the year. Translation? The used-car industry has become so uncertain that Carvana can no longer take stock of the current situation.
This isn’t an enthralling sign to shareholders that things will soon get better, which is why I wasn’t surprised to see CVNA stock down 6% on the day.
On the opposite side of the inflation conversation sits — erm, soars? — American Airlines (Nasdaq: AAL).
Unlike some of its other high-flying foes in the airline industry, American said that March was the first month since the start of the pandemic that revenue surpassed 2019 levels.
While the company still hasn’t reached cruising altitude yet in terms of profitability — it reported an adjusted loss of $2.32 per share in Q1 — American says that things are looking up for the second quarter. It now expects Q2 sales to climb 8% higher than 2019 figures even though it’ll fly far less planes than three years ago.
Has it only been that long? These three years have felt like an eternity, I tell you.
To make up for its capacity headwinds, American will take a page out of its competitors’ book and raise the cost of its flights to offset rising inflation. Unlike fellow travel company Carvana, however, American has more pricing flexibility and can change course easier based on current market conditions.
And flexibility, it seems, is the name of today’s inflationary game. As such, AAL stock jumped nearly 5% following today’s news.
It’s been about two whole weeks since AT&T (NYSE: T) and WarnerMedia — now Warner Bros. Discovery (Nasdaq: WBD) — went their separate ways, and I must say, the initial breakup doesn’t look too bad for the broadband telecom company.
AT&T reported first-quarter earnings this morning that saw revenue hit $38.1 billion — just shy of Wall Street’s consensus estimate. This figure includes AT&T’s ex, WarnerMedia, but it’s the last time the mass media company will show up on AT&T’s financial filings.
The way AT&T tells it, the now-divested media segment weighed heavily on the company’s profit margins this quarter after launching CNN+ (which has already been killed off in the time it took to send this to you) in the U.S. and HBO Max in several international streaming markets.
Without WarnerMedia, AT&T made an adjusted per-share profit of $0.63 — beating the Street’s $0.61 per-share projection. Postpaid subscribers also grew by 965,000 users last quarter, well ahead of Wall Street’s 573,000 estimate.
In other words, AT&T’s investment into the 5G and fiber optic markets seems to be paying off. It continues to add new customers at a healthy clip — and it’s made significant strides to keep existing customers through upgrade packages and promotions.
Neat. So, what’s the catch?
Well… AT&T’s subscription growth looks growthy until you compare it to the number of new users who signed up for HBO Max the past three months: a whopping 3 million. That marks a 12.8 million increase in HBO Max users year over year.
Things is, HBO Max is now part of Warner Bros. Discovery, which AT&T just spun off — so this is the last time that AT&T can boast about HBO’s booming market before it falls under Discovery’s financial disclosures. Confused yet?
I knew I shouldn’t have eaten that fourth brownie last night…
Basically, HBO is looking like a strong contender in the cutthroat streaming market and has now become the third-largest streaming platform in the U.S. (Technically, Disney+ and Hulu are owned by the same company, but we’ll save that can of worms for another day).
Had AT&T held on to HBO, its stock probably would’ve experienced a much bigger pop today. But hey, them’s the breaks when you streamline your business … and no one can say they weren’t Warnered.
That’s all, folks!
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