Monday’s Headlines: Risks Ahead For Tesla?
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
Duluth Trading (DLTH) +2.4%
Markel Corp (MKL) +1.5%
American Tower (AMT) +0.9%
Yext (YEXT) +0.9%
Ericsson (ERIC) +0.7%
Moving Down ⬇️
DocuSign (DOCU) -20.1%
Baozun (BZUN) -14.5%
nCino (NCNO) -13.9%
Huazhu Hotels Group (HTHT) -12.2%
Etsy (ETSY) -11.5%
1. Down more than 30% year-to-date (YTD), the last thing Tesla (TSLA) investors want to hear about is the rising risk of inflation. Unfortunately, the ubiquitous buzzword found its way into Tesla’s plans on Sunday, after CEO Elon Musk highlighted that the company is facing “significant inflationary pressure in raw materials and logistics.” Russia’s invasion of Ukraine has been ramping up the prices of metals used in cars — this, coupled with rising housing, food, and gas prices, has painted a grim short-term picture for manufacturing companies like Tesla. Investors should expect some near-term turbulence and can read the full story here.
2. The UK and EU are joining forces once more to take on Google (GOOG) and Meta (FB). A joint probe will look into the companies’ 2018 “Jedi Blue” agreement, which saw the pair team up in advertising. They will join U.S. regulators who, in January, accused Google and Meta of rigging auctions for online ads and illegally fixing prices, with smaller companies suffering as a result. Meta, which has struggled of late due to Apple’s iOS 14.5 privacy changes, has offered to cooperate, while Google has pulled a ‘too-cool-for-school’ “no comment” on regulators. With investigations like this tending to drag on for years, rather than months, investors should not expect major headwinds but can read up on the situation here.
3. Like most of us back in 2008, Etsy (ETSY) shareholders will be shaking their fists at Deutsche Bank this morning for losing them money. Deutsche has initiated coverage on Etsy for the first time, but only with a hold rating, and a $145 price target that implied little upside in the stock, which closed near $137 a share on Friday. The bank warned that new users gained during COVID-19 will spend less on Etsy once the novelty has worn off. Fair points, but a bit short-term for our liking. And while we normally don’t put weight behind analyst coverage, it doesn’t mean that we can’t listen every once in a while, even if it doesn’t impact our long-term buy-and-hold strategy. You can read the full coverage here.
Get this week’s full earnings calendar here.