Weekly Stockwatch: Elon Musk Buys Twitter Share, Tesla Giga Texas Fest, Amazon Rocket Deal & More
Elon Musk Becomes Twitter Shareholder
In the week's biggest news, the CEO of Tesla (TSLA) has acquired an around 9% stake in social networking firm Twitter, as a filing with the US Securities and Exchange Commission (SEC) revealed at the start of the week [1]. Twitter also gave him a seat at the Board of Directors until 2024, perhaps in a move to contain his share, since the announcement stipulates that mr Musk cannot own more than 14.9% of the firm's stock during that period. [2]
The disclosure came just a few days after he had criticized Twitter for "failing to adhere to free speech principles" and had asked his 80+ million followers on the platform "what should be done" [3], with some suggesting that he should buy the company and others urging him to create his own social media platform.
Mr Musk is an agent of change and an industry disruptor and his seat at the board can potentially lead to shake-ups. He definitely did not lose any time after the announcement and asked his followers to vote on whether they "want an edit button" [4] and did not hide his aspirations in his reply to Twitter's CEO, saying that he is "Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!" [5].
We need to note though that he firm had announced from last week, that it was working on an edit button. [6]
TWTR.us skyrocketed around 27% yesterday on Monday after the news, extending its gains and 2022 high on Tuesday.
Tesla Texas Factory Opening Party
Elon Musk had all the lights on him this week, as he hosted the opening party of Tesla's new factory in Austin, Texas on Thursday [7], after having inaugurated the company's first European plant in Germany last month. Tesla now has six plants in three continents and aims to produce around 500,000 Model Ys in the Texas factory, with the first ones having been delivered during yesterday's event.
Speaking in front of an electric crowd, Mr Musk provided an update on autonomous driving, saying that "We're aiming to go to wide beta for almost all Full Self-Driving customers in North America this year".
He also teased upcoming products, including a Robotaxi which will look "quite futuristic" and noted that the current year is about "scaling up and then next year there's gonna be a massive wave of new products".
Most importantly, he offered an update on the future vehicle lineup. In 2023 the firm will be in production with the Roadster, the Semi and the long-awaited Cybertruck, which he said is going to be "epic" and which he showcased at the end of his speech.
Tesla and its CEO are known for delays and not delivering on promised timeframes, while the chip shortages and supply chain disruptions could challenge those plans, although Tesla has generally handled them better than most competitors.
At the beginning of the month, the king of the Electric Vehicle (EV) arena, had registered another record with the delivery of 310,048 vehicles in the first quarter of the year [8]. Focus now will shift to the full financial results for that period, which are scheduled for April 20.
Ford Q1 Sales Drop
The automaker's total sales in the US dropped 17.1% year-over-year in Q1, to 432,132 units and 25.6% in March to 159,328 units. The Retail Sales on a monthly basis however, registered a 23.2% increase. [9]
Sales of its iconic F-Series truck saw a significant 31% decline during the first quarter, whereas last month, the hotly-anticipated electric variant - the F-150 Lightning – got a 320-mile range for the top version from the US Environmental Protection Agency (EPA). [10]
Ford said that it achieved record sales of electrified vehicles in the quarter, expanding 37.9%, while the Mustang Mach-E sales ticked up 1.8% to 6,734 units.
Andrew Frick, vice president, Sales, Distribution & Trucks commented that "While the global semiconductor chip shortage continues to create challenges, we saw improvement in March sales".
F.us has made a poor start to the year, despite January's multi-year high, having entered its fourth losing month. This week it sheds more than 10% so far and sets fresh 2022 lows.
Shell Writes-Down Billions from Russian Exit
Just a few days after the war in Ukraine started, the oil giant had announced its intention to exit its joint ventures with Russian Gazprom and related entities [11]. Last month it also announced a phased withdrawal from all Russian crude oil, petroleum products, gas and liquefied natural gas (LNG), after drawing criticism for the purchase of crude oil from the country [12].
This week, Shell published its update for the first quarter of the year [13], based on which it now expects a $4 - $5 billion impairment from exiting its activities in Russia. "These charges are expected to be identified and therefore will not impact Adjusted Earnings", with the full financial results scheduled for early-May.
The firm also said that it expects a deprecation of $2.8bn-$3.1bn in its Upstream business, of $1.2-$1.4 billion in the Integrated Gas sector, of $700-$900 million in the Oil Products division and of $250-$300 million in the Chemicals segment.
SHEL.uk has entered its fifth straight profitable month and today it posts highs not seen since late January of 2020, reacting from yesterday's drop due to the write-down news.
Amazon Secures Rocket Deal
The online retail behemoth signed rocket deals with three firms: Arianespace, United Launch Alliance and Blue Origin that belong to its iconic founder and former CEO Jeff Bezos. With these agreements, it secured up to 83 launches, over a five year period, for Project Kuiper. [14]
This is Amazon's initiative to build a network of satellites, in order to increase global broadband access and these companies will launch the majority of its 3,236-satellites.
Amazon said that these agreements "comprise the largest commercial procurement of launch vehicles in history" and will spur innovation and job creation in the space industry.
This is definitely one area that Elon Musk was not involved in this week, since his SpaceX firm was (obviously) not selected.
Last month, the company had announced a 20-for-1 stock split, to take place in June, pending shareholder approval. [15]
Credit Agricole Buys Stake in Banco BPM
The French bank announced on Thursday the purchase of a 9.18% stake in Banco BPM, noting that this "highlights its very positive appreciation" of the Italian bank's qualities and added that it aims to expand the scope of this strategic partnership".
Last month, the firm had suspended its activities in Russia where it had 170 Russian employees and no retail activity. In Ukraine it has 148 branches, nearly 2,400 employees and 426,000 customers. [17]
Credit Agricole had reported Revenues of €9.5 billion for the fourth quarter of 2021, while the results for the first quarter of the current year are expected early next month.
ACA.fr is mixed today and tries to stop its four-day losing streak, but heads towards a poor week.
Next Week (April 11-15)
The next week will be short for many stock markets due the Easter holidays, but this does not mean that it will not be interesting.
As we have entered the second quarter, the corporate world will begin publishing its financial results. Banking giants JP Morgan (JPM.us) and Citigroup (C.us) stand out, as well as Delta Airlines (DAL.us).
To read more about some of the companies that will be in our radar during the current quarter, read the Top 10 Stock for Q2 2022 Part 1 and Part 2.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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