Tag: Morgan

Saudi Arabia — which Elon Musk claimed would back a buyout — cut its Tesla exposure: FT

Bobby Yip | Reuters
Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China.

Saudi Arabia has reportedly taken out an insurance policy on its investment in Tesla, which dramatically cuts its net exposure to the stock, just months after CEO Elon Musk claimed the kingdom was prepared to back a deal to take the electric car maker private.

Musk settled fraud charges with the Securities and Exchange Commission in September over the claim, agreeing to step down as Tesla's chairman, pay a $20 million fine and appoint new board members.

In recent weeks, Saudi Arabia's Public Investment Fund has hedged nearly its entire 4.9 percent stake in Tesla, the Financial Times reports. That means the PIF still holds the shares, but it has taken out other positions that protect it from a drop in Tesla's stock price.

Tesla tanks after Elon Musk lays out a 'difficult' road ahead
5:37 PM ET Fri, 18 Jan 2019 | 05:31

The Financial Times first revealed the PIF's stake in August. Almost immediately after that, Musk tweeted that he had secured funding to take Tesla private at $420 per share, later explaining that the Saudis would back the buyout. The SEC later charged the remarks were “false and misleading.”

According to the FT, the PIF put the hedges in place after the market closed Jan. 17 with the help of J.P. Morgan bankers. The following day, Tesla announced layoffs and warned of “very difficult” times ahead. Tesla's stock price has fallen about 15 percent since then.

Musk told the FT that there hasn't been communication with the PIF in months and Tesla is not aware whether the kingdom still holds the shares. The PIF and J.P. Morgan declined the FT's offer to comment.

Tesla's stock initially dipped by more than 2 percent on the FT report, but the shares ended the day down modestly.

While Saudi Arabia is the world's largest oil exporter, its investment in electric car pioneer Tesla is part of Crown Prince Mohammed bin Salman's drive to diversify the nation's economy. The PIF has become a major investor in tech companies under Crown Prince Mohammed.

Read the full story here.

Musk not worried about Tesla Model 3 demand, Wall Street thinks otherwise

(Reuters) – Tesla Inc shares fell on Thursday as Wall Street wondered if demand for its mass market Model 3 sedan could be sustained while it tries to make substantial inroads in China. FILE PHOTO: A Tesla logo is seen at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai, China January 7, 2019. REUTERS/Aly… Continue reading Musk not worried about Tesla Model 3 demand, Wall Street thinks otherwise

Surprise exit of Tesla CFO unnerves analysts: ‘Significant loss of institutional knowledge’

Watch three Tesla experts debate the electric car maker's mixed earnings report
4 Mins Ago | 01:58

Tesla's announcement that Chief Financial Officer Deepak Ahuja is retiring has unnerved Wall Street's top analysts and overshadowed the company's sales beat in the fourth quarter.

Many viewed the loss of the longtime executive as the most significant in a string of high-profile departures as the electric car manufacturer struggles to retain talent. The company said in September that chief accounting officer Dave Morton was leaving the company after less than a month on the job, while head of human resources Gabrielle Toledano decided last year not to rejoin the company after a leave of absence.

Others chose to highlight Ahuja's unseasoned replacement, Zack Kirkhorn, who will take the financial reins of the $53 billion public company just six years out of business school.

“We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO,” wrote AB Bernstein analyst Toni Sacconaghi.

To be sure, Tesla reported better sales in the fourth quarter than Wall Street analysts had expected with revenues of $7.23 billion, more than double its $3.29 billion in revenue during the same quarter in 2017. And while profit fell short of projections, the company's stock crept higher immediately following its earnings announcement based on the solid sales numbers and a decent 2019 outlook.

However, the equity quickly declined after CEO Elon Musk announced during the earnings conference call that Ahuja is leaving after almost 11 years at the company. The stock fell 3.7 percent Thursday morning.

Here's what Wall Street analysts thoughts about Deepak Ahuja's departure.

AB Bernstein (Market Perform)

“Surprisingly, Tesla's CFO Deepak Ahuja announced that he was retiring, and would be succeeded by Zack Kirkhorn, Tesla's current VP Finance. We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO, just six years removed from business school.”

Goldman Sachs (Sell)

“Management announced that CFO Deepak Ahuja would be retiring from his position at the firm in 2019 and would be replaced by Zach Kirkhorn, who joined Tesla nine years ago. Mr. Ahuja had previously left his position as CFO of Tesla in 2015, but returned in early 2017. We believe the changeover may cause some uncertainty for investors as Tesla just saw two consecutive quarters of profitability and positive cash flow, and we see potential for a less stable path forward due to a sequential step-down in deliveries, working capital headwinds and convertible debt payment.”

J.P. Morgan Chase (Underweight)

“We expect investors to react negatively to the replacement of Deepak Ahuja, 56, as CFO with Zack Kirkhorn, 34, Tesla's current Vice President of Finance, given Mr. Ahuja's long automotive industry experience and 11-year tenure as the firm's CFO (across two separate stints), during which he provided relative stability to the firm's finance staff that has otherwise seen a great deal of churn.”

Barclays (Underweight)

“While the call had some positives around cash (largely due to under spending on capex and opex), those were overshadowed by the announcement of departure of the CFO and the absence of an experienced Silicon Valley (much less automotive experienced like ex-CFO Ahuja) vet to replace him. We remain underweight with a $210 price target.”

Morgan Stanley (Equal-weight)

“At the very end of the analyst conference call, Elon Musk announced that CFO Deepak Ahuja was retiring and will be replaced by Zack Kirkhorn who is VP of Finance and has been at the company for 9 years. CFO changes are significant events and we look forward to meeting Mr. Kirkhorn.”

— With reporting by
Michael Bloom
.

Investors Pour Money Into Self-Driving Cars to Capitalize on Data

Aria Systems/Tag Hartman-Simkins Strategic Investments When it comes to self-driving cars and other autonomous vehicles (AVs), investors are much more interested in the data they’ll collect than the cars themselves. The self-driving car bubble burst as technological reality fell far behind AV companies’ lofty predictions. But Wall Street investors are still interested in AV companies that… Continue reading Investors Pour Money Into Self-Driving Cars to Capitalize on Data

UPDATE 1-Scout24 rejects approach for car unit from Auto1 – sources

* Scout24 turned down approach by Auto1, sources say * Company previously turned down billion euro takover bid (Adds detail, background) FRANKFURT, Jan 30 (Reuters) – German online classifieds company Scout24 AG has rejected an expression of interest for one of its businesses from a rival, people close to the matter said. German used-car dealing… Continue reading UPDATE 1-Scout24 rejects approach for car unit from Auto1 – sources

Chinese EV carmaker NIO aims to raise $650 million via convertible bond

HONG KONG (Reuters) – Electric carmaker NIO Inc, among rivals to Tesla in China, launched a $650 million five-year convertible bond on Wednesday, aiming to use the proceeds to fund expansion. FILE PHOTO: A man is silhouetted in front of Nio cars at the auto show, in Shanghai, China April 20, 2017. REUTERS/Aly Song The… Continue reading Chinese EV carmaker NIO aims to raise $650 million via convertible bond

New Morgan ‘Wide Body’ sports car caught testing

Morgan is set to launch an all-new sports car this year, and the first shots of prototypes testing have emerged.  As expected, the model’s design is a familiar adaptation of the 1930s-inspired look that Morgans have carried for decades, set to evolve further with a new range-topping model in 2020. But under the skin there’s substantial… Continue reading New Morgan ‘Wide Body’ sports car caught testing

Lyft, Gasparilla’s Exclusive Transportation Partner, is teaming up with Captain Morgan to provide pirate themed fun and free rides!

Ahoy Mateys! Lyft is the official transportation partner of Gasparilla 2019 and is teaming up with Captain Morgan (@CaptainMorganUSA) to provide pirate themed fun and free rides. Beginning Jan. 21, look out for specialty Lyft and Captain Morgan wrapped Lyft cars “sailing” (or driving) the Tampa seas. On Jan. 21, Monday of Gasparilla week, you… Continue reading Lyft, Gasparilla’s Exclusive Transportation Partner, is teaming up with Captain Morgan to provide pirate themed fun and free rides!

Tesla dives, but analysts stay bullish: Job cuts signal ‘productivity gains’

Tesla dives, but analysts stay bullish: Job cuts signal 'productivity gains'

Job cuts at Tesla are not quite the bad news as first seemed, several Wall Street analysts said Friday.

“Reducing headcount also suggests productivity gains,” Jefferies analyst Philippe Houchois said in a note to investors. “This is, in our view, consistent with slower growth rates but mostly the scope to improve productivity and flow that we identified during our visit to the Fremont plant mid November 2018.”

Hours before the note, CEO Elon Musk announced that Tesla is cutting its full-time staff headcount by about 7 percent. The cut represents about 3,150 layoffs, based on the most recent Tesla staff count of 45,000 from Musk in October. Jefferies estimated the job cuts would affect 3,200 to 3,500 people at the electric vehicle maker. Houchois said the “reduction was not unexpected.”

“It's not a huge surprise to see this,” Oppenheimer senior research analyst Colin Rusch said on CNBC's “Squawk Box.”

“This looks to us like a mix of a proactive move in terms of cutting costs, … but also a bit of cleanup on the kind of massive push to get the Model 3 out this year,” Rusch added.

Four other analysts – Baird's Ben Kallo, Wedbush's Dan Ives, Canaccord Genuity's Jed Dorsheimer and Consumer Edge's Derek Glynn – also saw the cuts as largely positive.

Kallo: Cost management is key as “Tesla transitions to its next phase of growth. … We would be buyers on weakness following the announcement.”Ives: “Tesla will be able to emerge from the next 12 to 18 months” as a stronger and more profitable EV company.Dorsheimer: Tesla's business is now “set up for a more auspicious 2019.”Glynn: “Encouraged that management is focused on achieving profitability each quarter after years of operating at significant losses.”

“You never want to see a growth company cutting staff like this but we're not overly concerned,” Rusch said.

Citigroup's Itay Michaeli was one of the few analysts skeptical of Tesla's future following the announcement. Michaeli said in a note that the company's lowered fourth quarter guidance and job cut announcement supports the “argument that Tesla's [third quarter] results weren't sustainable.”

Tesla's stock fell 6.7 percent Friday from Thursday's close of $347.31 a share.

Here are the price targets for the analysts mentioned: Jefferies, $450 a share; Oppenheimer, $418 a share; Consumer Edge, $350 a share; Canaccord Genuity, $323 a share; Wedbush, $440 a share; Baird, $465 a share; Citigroup, $284 a share.

Lack of EV competition

The growing electric vehicle market was also front of mind for analysts. The competitive landscape, or lack thereof, gives Tesla another advantage even as it expects to report a thin profit in its upcoming quarterly results. Morgan Stanley estimates Tesla made up 90 percent of the value of the EV market in 2018, with 80 percent of the sales.

“Where's the competition?” Morgan Stanley's Adam Jonas said in a note to investors published shortly before the job cut announcement.

Jefferies and Oppenheimer similarly pointed out how large a gap there is in EV sales between Tesla and the rest of the auto industry.

“We continue to be underwhelmed by competitive offerings which we believe extend Tesla's window of opportunity, but note that scaling to 500,000 annual Model 3 production will be challenging and require a capacity expansion,” Rusch said.

“We believe Tesla continues to lead the industry as it moves Model 3 price point towards $35k while most competitors remain engaged in an EV negative margin sum game at higher price points,” Houchois said.

– CNBC's
Michael Bloom
contributed to this report.

WATCH:Elon Musk's big ambitions may be killing Tesla

Tesla's earnings were better than expected, but Elon Musk still has a lot on his plate
8:48 PM ET Wed, 2 May 2018 | 05:31

Tesla Stocks Plummet Over Concerns About Elon Musk’s Future

Car company Tesla's stock fell sharply after company CEO Elon Musk refused to sign a settlement deal with the SEC.

Electric car company Tesla’s stock has taken a dive after the Securities and Exchange Commission announced a civil suit against company CEO Elon Musk on Thursday according to CNBC.

Tesla’s stock closed at $307.52 Thursday. Shares of the popular car company plummetted 11 percent Friday after it was reported that Musk was being accused of fraud by the SEC.

The complaint against Musk says that he made “false and misleading” statements and didn’t properly notify regulators of material company events.

Musk called the SEC’s allegations “unjustified” and said he “never compromised” his integrity.

One Wall Street firm told CNBC that they were concerned that the lawsuit might impact the way people see Tesla’s brand and consumer’s desires to purchase the cars.

“We see the potential for negative sentiment to impact demand and employee morale,” Morgan Stanley analyst Adam Jonas said in an investor note. “In our view, this is particularly a risk if the situation is not resolved relatively quickly.”

Banking giant J.P. Morgan told CNBC that the news will likely affect Tesla’s ability to raise financing for future projects.

“We are concerned that decreased confidence in Tesla on the part of investors may impact the company’s ability to raise capital on amenable terms,” analyst Ryan Brinkman said in a note to clients Friday.

Financial institution Barclays told CNBC that if Musk was forced to leave because of the lawsuit, Tesla’s stock would take a massive hit.

“The SEC civil action may lead to Musk’s exit from Tesla (either permanently or temporarily) and the Musk premium in the shares dissipating,” analyst Brian Johnson said in a note to clients Friday.

“Tesla shares have ~$130 of Musk premium for future success that might dissipate.”

Musk is forced to watch his company’s stock freefall shortly after it was reported by CNBC that he pulled out of a settlement deal with the SEC.

The terms of the agreement would have seen Musk and his company pay a fine and wouldn’t have required Musk to admit any guilt.

The settlement would have required Musk to step down as chairman for two years and have Tesla appoint two independent directors to head the company in his place.

Musk pulled out of the deal at the last minute, however, reportedly refusing to sign the deal because he felt it wasn’t “truthful to himself” and that he “wouldn’t have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that”, according to sources.

Tesla was not immediately available for comment for that CNBC report.