Tuesday's Headlines: Tesla Deliveries Offer a Small Silver Lining

Tuesday's Headlines: Tesla Deliveries Offer a Small Silver Lining

Happy New Year from all of us here at MyWallSt.
 

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

ShotSpotter (SSTI) +3.8%

Baozun (BZUN) +3.1%

Lovesac (LOVE) +3.0%

Take-Two Interactive (TTWO) +2.8%

Under Armour (UAA) +2.0%

Moving Down ⬇️

Trupanion (TRUP) -2.4%

Etsy (ETSY) -2.4%

MercadoLibre (MELI) -2.3%

Texas Roadhouse (TXRH) -2.1%

Axos Financial (AX) -2.0%
 

Tesla Deliveries Offer a Small Silver Lining 😅

Tesla reported its end-of-year production and delivery metrics yesterday and, surprisingly enough, it actually made for pleasant reading for shareholders. With its stock currently mired in an accelerated slide since the beginning of December, any semblance of good news will be welcomed with open arms by investors and management alike.

Let’s start with the bad news. Tesla produced 439,701 vehicles in the fourth quarter of 2022 and delivered a total of 405,278 in the same period. These figures fell short of Wall Street estimates, which had set the bar at around 427,000 deliveries. However, full-year deliveries of 1.31 million marked growth of 40% year-over-year for the electric vehicle (EV) manufacturer, and also set a new record for deliveries in a calendar year.

The fourth quarter miss on analyst expectations can likely be attributed to a number of factors, none of which involve the ongoing circus that is Elon Musk’s takeover of Twitter. COVID outbreaks in China coupled with the country’s strict COVID-zero policies led to significant disruptions to Tesla’s Shanghai plant — this alone likely had a massive impact on the firm’s overall production.

With rivals continuing to ramp up production and close the gap, Musk’s ongoing Twitter turbulence, and a share price plunge that has left even the most ardent of investors worried, this relatively good news still wasn’t enough to buoy shareholders. Tesla is trading down close to 4% premarket as people appear to be fixating on the firm falling short of analyst expectations as opposed to its year-over-year growth.
 

Record Deliveries for China’s EV Makers 🚗

Shares of Chinese electric vehicle manufacturers are trading higher today on the Hong Kong exchange after Li Auto, BYD, and NIO all posted record monthly delivery numbers for December.

Li Auto was the largest gainer for the day, climbing more than 10% after it posted an increase in deliveries of 51% compared to December of last year. The strong month caps a year for the burgeoning EV player which saw it increase deliveries by 47%.

Competitors BYD and NIO had more muted reactions, up 5% and 2% respectively. BYD’s December saw it deliver 235,197 electric cars and hybrids, marking growth of 150% year-over-year. For 2022, sales were 1.86 million units, up 209%. NIO delivered 15,815 vehicles in the month, up 51% year-over-year. For 2022, sales increased by 34% to 122,486 vehicles.

China is the world’s largest market for electric vehicles, with more than 50% of global market share. While there have been a number of issues that have affected the players in the region, a significant pull-back from its strict zero-COVID policies will be a positive for these businesses, as they can expect significantly fewer production delays in 2023.
 

General Electric Finally Set to Spin Off Health ⚕️

The famed conglomerate will finally begin the arduous journey of breaking up some of its key industries this week. Once the most valuable company in the world, General Electric has suffered a significant decline since then and has struggled to keep pace in a world where wide-reaching conglomerates simply can’t maintain the type of strict focus necessary to succeed on all fronts. This spinning off of some of its industries will allow each arm to simplify and refocus around a singular market.

The first of these spinoffs will begin trading this week, with GE Healthcare Technologies Inc. trading on the Nasdaq under the ticker symbol GEHC. A further spinoff is planned for early 2024, with its gas and wind turbines arm combining with some other energy-related businesses to become GE Vernova.

GE Healthcare will continue to operate as it has previously, manufacturing items such as MRI machines and various other types of medical equipment. It currently has close to $18 billion in annual revenue, just above 24% of General Electric’s total 2021 revenue. Just over 80% of the shares in GE healthcare will be distributed, with General Electric keeping the rest.

General Electric is down close to 13% in the past year, outpacing the S&P 500 which is down close to 20% in the same period.