📣 Trump’s stock surge

Friday, October 22, 2021 by Robinhood Snacks |
A Musk-ular quarter [skynesher/E+ via Getty Images]

A Musk-ular quarter [skynesher/E+ via Getty Images]

Yesterday’s Market Moves
Dow Jones
35,603 (-0.02%)
S&P 500
4,550 (+0.30%)
Nasdaq
15,216 (+0.62%)
Bitcoin
$62,830 (-4.83%)

Hey Snackers,

The downside of living in an exclusive gated community: It’s harder to escape when rodents the size of St. Bernards invade. The world’s largest rodent is loving the manicured lawns.

The market-tracking S&P 500 index closed at a fresh record yesterday, as investors digested another round of earnings. Snap stock plunged 22% after quarterly sales missed expectations, while WeWork shares jumped on their first day of trading — two years after its botched IPO.

DWAC

Trump’s back... with a SPAC? Former President Trump wants to take on Big Tech and “create a rival to the liberal media” with his own biz: Trump Media & Technology Group. ICYMI: Trump’s still barred from Twitter, Facebook, and YouTube. Yesterday, Trump’s company said it was going public by merging with Digital World Acquisition Corp. (aka DWAC), a special purpose acquisition company (aka SPAC — or blank check company).

  • DWAC shares more than 4X’d in value yesterday. It became the most traded stock on the Nasdaq and NYSE, changing hands 470M+ times.
  • Trump’s company plans to launch a social network called Truth Social next year (it looks a lot like Facebook).
  • Also in the works: a self-described “non-woke” Netflix rival called TMTG+, a CNN competitor called TMTG News, and an Amazon cloud rival.
  • Few deets: The only other TMTG employee announced was Scott St. John, former producer of “Deal or No Deal.”

The Trump hype machine… Trump has used his name to promote other businesses, like his casinos, hotels, and Trump University. But his biz record is financially and legally questionable. His only previous public company, Trump Hotels & Casino Resorts, lost money every year until it went bankrupt (one of his six bankruptcies). And the Trump Org and its CFO were recently charged with 15 felony counts, including tax evasion.

THE TAKEAWAY

SPACs attract big names… Companies that go public via a SPAC sometimes face less oversight than those that IPO, which can help raise cash more quickly — especially when there’s a big name behind them. Other celebs like Shaq, Serena Williams, and Jay-Z have launched their own SPACs. Meanwhile, the SEC warned this year that it’s “never a good idea to invest in a SPAC just because someone famous sponsors or invests in it.”

Muskular

Elon(g) profit streak… nine quarters long, to be exact. Tesla notched another sales and delivery record last quarter. Despite supply-chain crunches and a global chip shortage, Tesla has been resilient compared to other carmakers, and still plans to boost deliveries by 50% each year.

  • 241K: The number of Teslas delivered last quarter. The lower-priced Model 3 and Model Ys made up a whopping 96% of the haul (sorry, S and X).
  • $1.6B: Tesla’s profit more than 4X’d from the same quarter last year, despite rising material and labor costs (#flation).

A Muskular effort... Tesla wasn’t immune to supply struggles: Its gig factories still aren’t operating at full capacity, which means longer delivery times and slower product rollouts (new Cybertruck ETA: 2023). Still, Tesla owns multiple stages of its own supply chain (it’s “vertically integrated”). Think: Tesla makes the machine that makes the Tesla. That's made it more resilient during the pandemic than many other carmakers.

  • GM’s US car deliveries dropped to 446K last quarter, down one-third from a year ago, because of supply disruptions.
  • Ford slashed production of its best-selling F-150 pickup truck and other profitable cars — again.
  • Chip shortages could cost automakers $210B this year. Tesla avoided some of the drama by manufacturing some of its own chips for its latest models.
THE TAKEAWAY

Sometimes fewer products can mean more profits… especially during a global supply shortage. Legacy car manufacturers like GM and Ford produce numerous models on a larger scale. Meanwhile, Tesla and Chinese EV rival Nio offer just a handful, relying on a leaner supply chain to meet demand. Like Tesla, Nio also posted record deliveries last quarter, partly thanks to China’s investment in domestic production.

What else we’re Snackin’

  • Ghosted: Snap stock plunged 22% after Apple’s new iPhone privacy settings hurt the selfie giant’s ad sales more than expected.
  • Vax: Pfizer found its vaccine to be 95.6% effective as a booster shot, which could push the FDA to expand its booster guidelines.
  • Coinmart: Walmart announced plans to allow customers to buy Bitcoin from Coinstar kiosks in some of its US stores.
  • Halt: The Fed placed new personal-investing restrictions on its own officials after two Fed presidents resigned over conflicts of interest last month.
  • Reveal: Facebook's oversight board asked the social giant to fork over more info about how it deals with high-profile accounts, saying the social network hasn’t been “fully forthcoming.”
  • Beefy: Chipotle’s sales jumped 22% last quarter, as higher menu prices offset rising beef and shipping costs.

Friday

  • Earnings expected from: Whirlpool, Honeywell, and American Express

Authors of this Snacks own: Bitcoin, and shares of Walmart, Snap, GM, Amazon, and Tesla

ID: 1888498