Thursday's Headlines: Musk Sells More Tesla Shares
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Farfetch (FTCH) +6.6%
Baozun (BZUN) +4.6%
IMAX (IMAX) +4.5%
Bill.com (BILL) +4.2%
Atlassian (TEAM) +4.1%
Moving Down ⬇️
Core & Main (CNM) -5.0%
Match Group (MTCH) -5.0%
Axos Financial (AX) -4.3%
Roku Inc. (ROKU) -3.9%
Tesla, Inc. (TSLA) -2.6%
Musk Sells More Tesla Shares
Shares of Tesla Inc. are under increasing pressure this morning after Elon Musk sold more than $3.5 billion worth of the stock. According to a disclosure made public on Wednesday, the world’s second-richest man unloaded nearly 22 million shares in the company over a three-day period.
This is the second round of sales Musk has made since acquiring Twitter for $44 billion in October.
This will no-doubt upset Tesla investors who believe that Musk is putting too much focus on the social media company and possibly even damaging the Tesla brand that he has been closely associated with for over a decade. Shares of Tesla are down 60% year-to-date, wiping off over $700 billion in market capitalization.
In other Elon-related news, the Twitter account @ElonJet has been permanently suspended from the platform. The account uses publicly available information to track Elon Musk’s private jet. Less than a month ago, Elon had said that he wouldn’t suspend the account.
“My commitment to free speech extends even not to banning the account following my plane, even though that is a direct personal safety risk”, he tweeted in November. According to reports, Elon had offered the creator of the account, Jack Sweeney, $5,000 to shut it down, but was rebuffed.
According to TechCrunch, Twitter has now updated its policies to prohibit sharing live location information. Other live flight trackers that Sweeney operated, including one that tracked Mark Zuckeberg, have also been suspended.
Delta Predicts Strong Demand and Earnings in 2023
Delta Airlines has posted a bullish message for 2023, with the company foreseeing strong demand for travel in the coming year. The major airline hosted an investor day yesterday and the forecasts are strong, with management expecting revenue growth of 15% - 20%, earnings to almost double to $6 a share, and free cash flow to clock in at $2 billion, with expectations for this figure to jump to as much as $4 billion by 2024. It also raised its earnings guidance for Q4 of this year.
Airlines have enjoyed a pronounced bounce-back in travel demand since the dark days of the COVID pandemic. Delta CEO Ed Bastian expects it to continue into next year, despite the macroeconomic environment: “We’ve seen our recession. Consumers are prioritizing their spend, where they’re making choices, and they’re prioritizing investing in themselves and experience.” He would go on to say that business travel is back to about 80% of 2019 levels, however, he claims “It’s never going to return to what it was like”.
Shares of Delta were up 3% yesterday off the announcement, far outpacing the wider market. The stock is down 15% year-to-date.
TikTok May be Banned from Capitol Hill
Yesterday, the United States Senate unanimously passed a bill that would ban federal employees from downloading or using the social media app TikTok. The move comes after months of growing concern that the video-based social media and its parent company ByteDance pose a threat to national security due to their data collection. There are fears the company could turn over data on Americans to the Chinese government.
ByteDance has repeatedly stated that US data is stored on domestic servers and the company would not turn over data even if prompted. However, in early 2022, Buzzfeed News found that US user data could be accessed by employees based in China as recently as January. One employee even stated, “everything is seen in China”.
In response to the bill, a TikTok spokesperson stated:
“We’re disappointed that so many states are jumping on the political bandwagon to enact policies based on unfounded falsehoods about TikTok that will do nothing to advance the national security of the United States.”
The bill now heads for the House of Representatives where it will need approval before the current legislative session comes to an end next week. Presently, TikTok is working with the Committee on Foreign Investment in the United States to reach a national security agreement that may ward off the legislation but this is unlikely to be reached before the end of the year.