Wednesday's Headlines: Musk Sells More Tesla as Twitter Struggles
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Planet Fitness (PLNT) +8.6%
Trupanion (TRUP) +7.2%
DraftKings (DKNG) +6.4%
PayPal (PYPL) +4.5%
Moving Down ⬇️
Tripadvisor (TRIP) -17.3%
Take-Two Interactive (TTWO) -13.7%
BlackLine (BL) -3.9%
Boston Beer Co. (SAM) -3.6%
DocuSign (DOCU) -3.1%
Disney Shares Slides as Costs Soar 🎥
Shares of The Walt Disney Company (DIS) are down 8% in pre-market trading after the company posted disappointing fourth-quarter earnings that missed analyst expectations on both the top and bottom line.
Revenue for the quarter came in at $20.15 billion. That represented an 8.7% year-over-year growth, but fell over a billion dollars short of what Wall Street analysts had hoped for. Earnings per share was 30 cents, excluding certain items. Analysts had been expecting 57 cents per share.
The miss comes as the company saw increased costs associated with its Disney+ streaming service, which brought in over 12 million new subscribers in the quarter. But that growth came at a huge cost with the segment losing $1.47 billion — more than twice what it lost in the same period last year. Disney+ now has 164.2 million subscribers globally.
“The rapid growth of Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally,” said Disney CEO Bob Chapik. He reiterated that Disney+ should become profitable in 2024 despite planned cost-cutting measures in marketing and content creation.
On a bright note, the company recorded its best ever quarter in its theme parks division. That segment took in $7.42 billion, up 36% year-over-year. That was despite rising gas prices, which have historically hurt the segment.
Upstart Sinks on Sliding Earnings 💵
Shares in Upstart (UPST) are plummeting premarket following its dismal third-quarter earnings report after the bell yesterday evening. The artificial intelligence-driven lending platform failed to meet expectations for earnings or revenue, while weak guidance for the upcoming quarter further intensified its premarket drop.
Upstart reported an adjusted loss per share of $0.24 on revenue of $157 million, a far cry away from analyst predictions of a $0.07 loss and revenue of $169 million respectively. This represents a significant underperformance at a time when faith in the company was already quite low. CEO Dave Girouard attempted to bolster investors by stating:
"We're eyes wide open to the challenges of the current macroeconomy, and determined to make the decisions that will optimize for the long-term success of Upstart."
It’s been a rough year so far for the lending platform, with its stock down close to 87% before the market opens today and it drops even further. And it looks like it’s not going to improve anytime soon, with the firm guiding for revenue of between $125 million and $145 million, while analysts had been anticipating closer to $185 million for the quarter. Similarly, losses for the quarter are expected to reach $87 million against a predicted $22 million — another large discrepancy in expectations.
Musk Sells More Tesla as Twitter Struggles 🐦
According to regulatory disclosures from November 4-8, Elon Musk has sold 19.5 million shares of Tesla (TSLA). This marks his third sale this year and is especially unusual considering Musk stated in August he wasn’t planning any more sales. It is unclear what the $4 billion generated from the sale are intended for but it likely has something to do with Musk’s problem child Twitter. Musk has sold more than $20 billion worth of Tesla since his takeover of the social media platform began.
On Friday, Musk tweeted that Twitter has suffered “a massive drop in revenue” and was losing almost $4 million a day. Some of this misfortune can be attributed to Musk whose erratic statements around platform moderation have left many advertisers running for the hills. According to a report from The Wall Street Journal, General Mills, Audi and Pfizer make up just some of the names on the growing list of companies unwilling to dance with the ‘Technoking of Tesla’. Advertising has typically accounted for about 90% of Twitter’s revenue.
That being said, Musk was quick to state Twitter’s problems were not his doing but the fault of “activist groups pressuring advertisers”.
At this time, Tesla has not responded to requests for comment on the sale.
Tesla’s stock is down more than 50% from its peak last year. So far, it seems unimpacted by the news of Musk’s sale.