💵 Tesla's 1st full-year profit

Friday, July 24, 2020 by Robinhood Snacks | Disclosures

Tesla accepts its 1st Oscar for "Best Year in a Profitable Role"

Dow Jones
26,652 (-1.31%)
S&P 500
3,236 (-1.23%)
10,461 (-2.29%)
$9,585 (+0.76%)
10-Yr US Treasury

Hey Snackers,

Dr. Fauci threw the 1st pitch at a fan-less Nationals Park for baseball's Opening Day (just a bit outside). Maybe the MLB should take a page out of Japan's playbook and fill empty stadiums with creepy yet adorable robot fans. So coordinated.

The Nasdaq took a hit yesterday on big stock drops from Microsoft, Amazon, and Apple — the report that the newly unemployed climbed to 1.4M Americans for the week didn't help.

1. Tesla posts a full-year of profit for the 1st time — now it could join the S&P 500 Club

Elon gets his $2B bonus... For the 1st time in its 17-year history, Tesla has posted four straight profitable quarters in a row. The stock surged on the news (surprise), making Tesla the 12th biggest company in the US by market value. Despite corona-conomy slowdowns (like its Fremont factory partially shutting), Tesla hit these numbers:

  • 90K = Tesla's car deliveries from April-June, down just 5% from last year. Meanwhile, car-making peers Ford and GM saw deliveries plunge over 30%.
  • $6B = How much Tesla did in sales. That's actually down 4% from the same quarter last year. And yet...
  • $104M = Tesla's profit, mostly thanks to environmental credit sales. Tesla's clean car production racks up green credits from regulators.
  • $428M = How much Tesla made selling credits to non-electric carmakers who need to offset pollution.

And an invite to the S&P 500 Club... Maybe. The famous S&P 500 index tracks stocks of the 500 most valuable public companies in the US. To be included, companies must post four straight profitable quarters.

  • Tesla just did that, so it's now worthy of the S&P's consideration (but it still needs an invite). Of course, Elon wants the S&P-status bragging right.
  • But more importantly, over $11T is invested in funds that track the S&P 500. If Tesla gets in, fund managers might start buying up the stock, driving the price up even further.

Context is king... Tesla stock has nearly 4X'd in value since peak pandemic in mid-March. Now it could become the largest company by market value to ever join the S&P. But Tesla has a tiny market share in the global car market, and has lost hundreds of millions since 2018. Toyota delivered 30X more cars than Tesla last year and is consistently profitable... but it's worth less than Tesla. After this streak, investors are expecting Tesla profits going forward. If that doesn't happen, the stock will likely fall.


When the Slackbot is annoying AF... Microsoft reported 13% sales growth and an insane $11B+ in profit last quarter. But party pooper Slack hit it with regulatory drama on the same day. Slack thinks Microsoft's being anti-competitive, so it filed an antitrust complaint in the EU.

  • The Slack-usation: Microsoft is trying to reduce competition in the work collab market by bundling Teams with its popular Office 365 Suite. Microsoft forces Office users to install Teams (and blocks them from removing it).
  • The issue: Slack's having a hard time getting companies that use Office to pay for Slack too, since Teams is included free of extra charge. Office = every Slack salesperson's nightmare.
  • The solution: Slack wants Microsoft to sell Teams as a standalone product, instead of bundling it with the omnipresent Office Suite. TBD whether the EU will formally investigate.

Cutting some slack... Microsoft has bundled a bunch of productivity apps with Office for the past 30 years. So naturally, it decided to throw in Teams right after launching it in 2016. But Microsoft isn't the only "bundling bully" in town:

  • Google bundles almost all its work collab tools into GSuite. It started offering its Meet video tool for free this year — Zoom could complain.
  • Amazon bundles Prime Video with your Prime subscription — Netflix could complain. It also throws in Prime Music — Spotify could complain.
  • Apple pre-downloads its Music app on your iPhone — Spotify did complain.

The disadvantage of being a “One-and-Only” company... "One & Only" companies like Slack and Netflix are successful for doing one thing really well. Buuut — they run the risk of getting overtaken by Big Tech companies with hundreds of products (that can afford to give away tools for free). Sometimes those freebies are the profit puppies of entire other companies. That could potentially crush them.

What else we’re Snackin’
  • Trending: Twitter's daily users grew 12% to 186M, but sales fell 19% for the quarter on corona-depressed ad spending.
  • Cut: AT&T's profit plunged on extreme cord-cutting, overshadowing the launch of its HBO Max streaming service.
  • Popcorn: AMC pushes US theater reopenings to mid-August as studios delay releases of blockbusters like Tenet, Mulan, and Star Wars.
  • Guac: Chipotle's digital sales 3X'd for the quarter — and it's introducing its own organic drinks.
  • Chipper: Intel posted strong earnings as WFH boosted computing demand — but shares tumbled on word its latest chip models are being delayed another 6 months.

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Snacks Daily Podcast

Requirements for launching any direct-to-consumer service: add a "+" or a "Now" to the name.

Unilever makes everything from Dove soap to Lipton tea. It also boasts Earth's largest ice cream biz, from Ben & Jerry's to Breyers to Klondike.

Enter: “Ice Cream Now,” Unilever's ice cream delivery service (with -110 degree dry-ice deliveries) to offset lockdown losses.

Tune into our extra snackable 15-minute pod to hear why we think this biz could melt.


Disclosure: Authors of this Snacks own shares of Microsoft, Spotify, Apple, Amazon, and Chipotle

ID: 1256603

Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2020 Robinhood. All rights reserved.