Tuesday's Headlines: Boeing 737 Max Returns To China

Tuesday's Headlines: Boeing 737 Max Returns To China

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Peloton Interactive (PTON) +4.6%

THOR Industries (THO) +4.5%

Calavo Growers (CVGW) +3.6%

Upstart Holdings (UPST) +3.1%

Twitter (TWTR) +2.4%

Moving Down ⬇️

DraftKings (DKNG) -13.8%

Wynn Resorts (WYNN) -12.2%

Huazhu Hotels Group (HTHT) -10.5%

Snowflake Inc. (SNOW) -9.2%

Redfin (RDFN) -7.3%
 

Here are the stories that you need to know ahead of market-open today, Tuesday the 11th of October.
 

Boeing 737 Max Returns To China After 4 Years ✈️

Shares of Boeing Co. rose marginally yesterday after its infamous 737 Max jet was used for a commercial flight in China for the first time in almost 4 years.

MIAT Mongolian Airlines, the national carrier for Mongolia, made a round-trip flight with passengers from Ulaanbaatar to the southern Chinese city of Guangzhou using a 737 Max, with further trips also scheduled for later in the month.

This is significant because Boeing’s 737 Max has been banned in China since March 2019. This grounding — alongside similar bans in the U.S. and Europe — came in the wake of two fatal crashes in Indonesia and Ethiopia that killed almost 350 people in total. These were subsequently determined to have been caused by a malfunctioning flight control system and Boeing was later charged with fraud for covering up the defect, paying over $2.5 billion in penalties and compensation.

However, whereas the bans on the model have since been long lifted in other regions, the Chinese ban is still technically in place, with Chinese carriers still not using the aircraft. As recently as last month, however, Boeing was in talks with Chinese aviation regulators with a view of returning the Max to regular service in the key region. This latest development has given investors hope that a return might come sooner rather than later.
 

Tesla Continues to Break Records in China Amidst Fierce Competition 🚗

Tesla (TSLA) has beaten its own monthly record for vehicle deliveries in China according to data released by the China Passenger Car Association. The company delivered over 83,000 cars from its recently upgraded plant in Shanghai for the month of September. It comes after the company suspended operations for several days in July in order to increase production capacity.

However, Tesla is still lagging behind its biggest rival in the region, BYD Co., who also surpassed its monthly sales record. BYD, a Shenzun-based company, delivered almost 95,000 EVs in September, as well as over 200,000 hybrid cars.

Tesla was the leading producer of electric vehicles in China pre-pandemic, but lockdown measures and supply chain issues have plagued the company since early 2020. BYD has managed to avoid many of the issues plaguing other companies by producing its own batteries and many of its own parts. China’s strict COVID-19 measures are still hampering production lines across the country.

Meanwhile, BYD has been slowly expanding internationally, signing a deal with German rental car company Sixt SE to supply thousands of electric vehicles for its fleet this year.

In other EV news, Polestar has confirmed that it still expects to deliver 50,000 vehicles this year. The company said that its China factory had recovered after lockdown-related delays and that it plans to release its newest model, the Polestar 3, on Wednesday.

Five9 Plummets as CEO Suddenly Departs ☁️

Shares in cloud software provider Five9 collapsed by over 25% yesterday following the sudden and unexpected resignation of its CEO. This puts its stock at lows not seen since late 2019. The outgoing CEO, Rowan Trollope, is to be replaced by former CEO Mike Burkland, who previously resigned from the post in 2017 after being diagnosed with cancer.

Trollope is leaving the company to take up a position as CEO of a privately held pre-IPO company operating in a different industry. Burkland, who has remained as chairman throughout Trollope’s time at the helm, cited excitement at the company’s future prospects:

“We are still in the early innings of the shift to the cloud, driven by key trends such as digital transformation and the strategic importance of customer experience. I believe Five9 is very well positioned in this massive market as we continue to execute on product innovation, our march up market and international expansion.”

Five9 is a provider of cloud software for contact centers. It enables support agents to provide a more robust service over the phone and web and reduces the impact that geographic location has on the service being provided. It gained significant media attention in 2021 after agreeing to be bought by Zoom in an all-stock purchase, before ultimately pulling out from the deal due to shareholder dissatisfaction with the agreed-upon price.

Five9 went public via IPO in 2014 and rose steadily up until early 2020, when it then became one of the stocks significantly boosted by the pandemic. Now, however, its pandemic-induced gains have eroded and the company is trying to gain some traction amid a difficult market for tech stocks worldwide. It's down close to 59% year-to-date and sits almost 72% off all-time highs witnessed in mid-2021.

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