Friday's Headlines: Tesla Slashes Prices to Offset Delivery Slowdown
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Upstart Holdings (UPST) +11.8%
Eventbrite (EB) +9.6%
MercadoLibre (MELI) +9.3%
Evolent Health (EVH) +7.1%
Moving Down ⬇️
Etsy (ETSY) -2.3%
Pinterest (PINS) -2.1%
Trupanion (TRUP) -2.0%
Veeva Systems (VEEV) -1.7%
Monster Energy (MNST) -1.6%
Tesla Slashes Prices to Offset Delivery Slowdown 💸
Leading electric vehicle (EV) manufacturer Tesla has announced that it plans to cut its prices across both the U.S. and Europe. The automaker has so far declined to comment on the reasoning behind these price cuts, but many are speculating that it is likely a ploy to try and increase sales volume to offset increases in competition. Price increases in the U.S. will also potentially allow Tesla to avail of more federal EV tax credits.
However, this could be a risky move for the Elon Musk-led company, as similar cuts in China recently sparked outrage, with many customers resorting to protesting at a delivery center in Shanghai after Tesla declined to offer any rebates. European and U.S. customers who have recently purchased a Tesla may consider similar action, with discounts of up to 19% — depending on the model and configuration — now available on what they would have purchased mere weeks earlier.
Recently, Tesla fell short of its expected 50% growth in annual vehicle delivery numbers, despite rolling out a number of enticing offers in the U.S. to try and boost its numbers. While numerous reasonable factors exist as to why Tesla missed this mark, investors and analysts alike are now worried for the future. Tesla’s production and delivery figures should undoubtedly rise in 2023, but so too will competition and scrutiny on the brand.
Tesla is set to report its fourth-quarter results later this month, on January 25th. All eyes will be on Elon and co. to see what the plan for the future is with the company currently down over 64% for the past year.
Americanas Misfortune is Mercado Libre’s Gain 🤑
South American retailer Americanas watched both its chief executive and chief financial officer resign on Wednesday after the discovery of a $3.88 billion accounting “inconsistency”. Outgoing CEO Sergio Rial has been in the position for less than two weeks. He will be replaced by Joao Guerra, a longtime Americanas executive who is said to have been uninvolved with financial management.
At this time, it is unclear what this accounting hiccup will mean for Americanas. The company stated independent auditors will be needed to determine the impact of the inconsistencies. In an attempt to alleviate investor and employees’ fears prior to his departure, Rial stated Americanas maintains 8 billion Brazilian reais ($1.5 billion) in cash and will "keep paying suppliers and other liabilities on time". However, he also said the company will likely need a capital increase.
Americanas is a staple of Brazilian malls and is one of the country’s leading e-commerce platforms. It trades on the Brazilian stock exchange under the ticker AMER3.SA.
Interestingly, Americanas is also a competitor of Mercado Libre, MELI controls 27% of the market while Americanas controls 21%. That has made the last few days rather exciting for Mercado Libre shareholders as the stock has jumped almost 20% on the hopes Americanas downfall will create an expansion opportunity.
Americanas, on the other hand, has seen its stock plunge 77%.
Lucid Races Past Production Expectations 🏎
Luxury EV producer Lucid has revealed that it managed to beat expectations for vehicle production in 2022. The California-based company manufactured more than 7,100 vehicles, outpacing the expected range of between 6,000 and 7,000. This news prompted a near 5% jump for Lucid’s stock yesterday.
It needs to be stated, however, that these expected production figures are a long way off what Lucid had been predicting at the beginning of the year. Initial targets were set at 20,000 vehicles produced, before the worsening macroeconomic climate and the lingering effects of COVID on the global supply chain forced significant revisions. The first revision in February cited the aforementioned supply chain disruptions as reason to reduce expectations, while a further revision in August put the blame on logistical challenges.
The company is now warning investors to expect deliveries to lag behind these production figures, as logistics challenges continue to mar the firm. For 2022, Lucid managed to deliver 4,369 vehicles. The company also declined to update its current reservation total, but the most recent figure from early November had total reservations of over 34,000. This number also excludes an agreement with the Saudi Arabian government to purchase 100,000 vehicles over the next 10 years.
Lucid will report its full-year earnings results on February 22nd, where it will hopefully provide some further clarity on where it stands.