LAS VEGAS (Reuters) – With Ford Motor Co’s stock at nearly a nine-year low and the company squeezed by tariffs and trade tensions, Chief Executive Jim Hackett sought to restore confidence among dealers gathered in Las Vegas this week, days ahead of announcing the automaker’s third-quarter results. Ford CEO Jim Hackett speaks to dealers at… Continue reading UPDATE 1-Ford CEO seeks to rally dealers as shares sink to new low
Tag: Morgan
Uber reportedly raises $2 billion in debut junk bond sale ahead of blockbuster IPO
Anindito Mukherjee | Getty Images
Dara Khosrowshahi, chief executive officer of Uber, looks on following a 2018 event in New Delhi, India.
Uber has raised $2 billion in a junk bond sale, according to a report, as it gears up for its 2019 stock market debut.
The ride-hailing firm raised $1.5 billion through the sale of eight-year notes with a yield of 8 percent — it had initially pitched $1 billion — and an additional $500 million by selling five-year notes with a yield of 7.5 percent in a private placement led by Morgan Stanley, according to the Financial Times.
Uber was not immediately available when contacted by CNBC; nor was Morgan Stanley. The FT said Uber had confirmed the sale's completion.
The embattled start-up is preparing for an initial public offering that media reports have noted could value it at more than $100 billion — far more than its last reported valuation of $72 billion, which it notched after a $500 million capital injection from Japanese carmaker Toyota. It is currently one of the most valuable privately held firms in the world.
The fundraising follows a separate report by the FT on Wednesday that said Uber has mulled the sale of minority stakes in its struggling self-driving unit, known as the Advanced Technologies Group.
“Shared self-driving cars will ultimately make transportation safer, more efficient, and more affordable for riders on the Uber network,” the company said in an emailed statement to CNBC in response to that report.
“Our team at the Advanced Technologies Group is wholly focused on building the safest self-driving technology out there, and we remain committed to supporting their efforts to make this self-driving future a reality.”
The autonomous driving unit suffered a major setback earlier this year after a fatal crash involving one of its driverless vehicles in Tempe, Arizona. It also ended a legal battle with Google's self-driving car division Waymo in February, with a settlement that saw Waymo take a 0.34 percent stake in the company worth $245 million at the time.
Uber's Chief Executive Dara Khosrowshahi said last month the firm is on track to launch its IPO next year and has no plans to sell the Advanced Technologies Group.
You can read the full FT report here.
Uber ‘could land $120bn price-tag’ in upcoming IPO
Uber could receive a valuation of as high as $120bn (£91bn) in its upcoming initial public offering, almost double the price-tag the ride-hailing company landed in August. The proposals from US banks suggested Uber seek a valuation much higher than the $76bn it was valued at in August during its most recent fundraising round. They are also said… Continue reading Uber ‘could land $120bn price-tag’ in upcoming IPO
Opel makes profit again
Tuesday, 07/24/2018 08:31 clock The car manufacturer Opel earns money again under its new French owner PSA. In the first half of the year, the operating result for the Opel division amounted to 502 million euros, as the company announced. Opel had previously been in the red for nearly 20 years. “After many years, the… Continue reading Opel makes profit again
Tesla shares plunge as Wall Street throws in towel, saying Musk departure could cost stock $130
Bobby Yip | Reuters
Elon Musk
Wall Street is buzzing over SEC's civil action against Tesla CEO Elon Musk, predicting significant negative ramifications for the electric car market due to the action.
Shares of the automaker were down 12 percent in Friday's premarket session.
The Securities and Exchange Commission sued Musk on Thursday, alleging for fraud. The complaint says Musk issued “false and misleading” statements and failed to properly notify regulators of material company events. Musk called the SEC's allegations “unjustified” and said he “never compromised” his integrity.
Barclays believes if Musk is forced to leave because of the SEC action, it will be weigh on Tesla's stock.
“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.”
Tesla's stock closed at $307.52 Thursday.
Johnson reiterated his underweight rating and $210 price target for Tesla shares.
One Wall Street firm is concerned the controversy about the lawsuit will hurt demand for Tesla's 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.”
Jonas reiterated his equal-weight rating and $291 price target for Tesla shares.
J.P. Morgan also thinks the news will affect the company's ability to raise financing.
“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.
Brinkman reaffirmed his underweight rating and $195 Dec. 2018 price target for the company's shares.
Citigroup also downgraded the stock to a sell rating from neutral.
“There's little question that Mr. Musk's departure would likely cause harm to Tesla's brand, stakeholder confidence and fundraising,” the note said. “If Mr. Musk ends up staying on, the reputational harm from this might still prevent the stock from immediately returning to 'normal.'”
Disclaimer
Lyft unveils second annual diversity report
Lyft has released its second annual diversity report outlining the gender and racial breakdown of its 4,000-person workforce. At a glance, little has changed from last year’s report, which was the first time the $15 billion ride-hailing company disclosed its diversity stats. Forty percent of Lyft’s workforce is female, a slight decrease from last year’s 42 percent,… Continue reading Lyft unveils second annual diversity report
Chinese electric carmaker NIO recovers from bumpy U.S. debut
(Reuters) – Shares of Chinese electric carmaker NIO Inc (NIO.N) bounced back from a 15 percent plunge in their market debut on Wednesday, a day after the company’s IPO was priced at the lower end of the expected range. Bin Li, CEO of Chinese electric vehicle start-up NIO Inc., rings a ceremonial bell as NIO… Continue reading Chinese electric carmaker NIO recovers from bumpy U.S. debut
Ford’s shares lag as CEO Hackett provides scant details of turnaround plan
Rebecca Cook | Reuters
Ford Motor Company president and CEO James Hackett
It's one of the biggest unknowns in the auto industry: How will Ford CEO Jim Hackett restructure the beleaguered automaker?
More than a year after becoming CEO, and two months after he said it will cost at least $11 billion to restructure Ford, Hackett has yet to give Wall Street details about his turnaround plan. The longer Hackett goes without unveiling his plan, the lower Ford shares slide. The stock is under $10, down almost 26 percent so far this year and close to a nine-year low.
“We just don't see much to get excited about in terms of the stock,” said Brian Johnson, auto analyst at Barclays.
Johnson, like others on Wall Street, expects Hackett to dramatically downsize the company as part of a plan to cut costs and exit businesses and markets where Ford is either losing money or struggling to grow profits.
South America and Europe are two regions Ford could eliminate or dramatically cut operations, according to analysts. Morgan Stanley's Adam Jonas gave a sobering assessment of Ford's business in South America. “In our opinion, it is very difficult to see Ford continuing operations on a profitable basis in the region,” he wrote in a note to clients in late August.
Jonas was even more blunt in assessing of Ford's operations in North America. “We estimate roughly one quarter of the region's physical and human capital is within businesses that have no path to positive ROIC (return on invested capital),” said Jonas.
What also worries analysts is the lack of details surrounding Ford's plan to capitalize on hefty investments in autonomous-drive vehicles and mobility solutions. At this year's Consumer Electronics Show, Hackett and his leadership team outlined their vision for the future of transportation.
“We're working on a new self-driving business model. It's a systems-based approach, transporting both people and goods,” said Jim Farley, president of global markets at Ford.
It sounds intriguing, but analysts wonder how much it will cost to develop these self-driving vehicles and how Ford will make money off of those mobility services.
Adding to investors' concerns is whether Ford will be forced to cut its dividend to preserve cash. The company has been adamant the dividend will remain in place. With $25 billion in cash, liquidity is not an immediate concern.
Still, this turnaround will be tough. In late August, Moody's downgraded Ford's credit rating to one notch above junk status saying, “Success could be challenged by having to address the serious performance problems in multiple business units simultaneously.”
When the plan will be revealed remains unclear.
“The real question is, is there more going on behind the scenes and under the surface than is apparent in the quarterly earnings,” said Johnson. “I think the bull case, such as there is on Ford, is that Mr. Hackett is driving deep, fundamental, cultural change in the company.”
— CNBC's Meghan Reeder contributed to this article.
Questions? Comments? BehindTheWheel@cnbc.com.
Tesla’s accountant quit after concluding Musk was ignoring go-private advice
Tesla executive Morton left after feeling Musk ignored him
1 Hour Ago | 03:10
Tesla's now former chief accounting officer, Dave Morton, quit the company after concluding CEO Elon Musk wasn't interested in accounting details around a potential take-private transaction, according to people familiar with the matter.
Morton resigned Sept. 4, according to a company filing released on Friday. Morton said in the filing “the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations.”
Morton joined Tesla on Aug. 6 after Tesla approached him for the chief accounting job. Morton saw an opportunity to work with a visionary such as Musk and make life easier for him by helping with some of the necessary housekeeping, according to people familiar with Morton's thinking.
The day after he started, Musk tweeted he was considering taking the company private with “funding secured.” Morton, who left his role as Seagate's CFO to join Tesla, was not flustered by the tweet and met with Musk to go over various details that would make a take-private difficult. He brought up specific details such as equity change of control provisions and potential step-ups in the value of Tesla's debt associated with a new controlling shareholder.
Musk and other executives didn't seem to care about the various financial obstacles, which concerned Morton, said the people. When Morton offered advice about capitalizing the company through other means rather than going private, he was ignored, said the people.
After two weeks or so at the company, Morton concluded he wasn't being heard or understood. He then started to think about leaving, one of the people said. The Securities and Exchange Commission reportedly served Tesla with a subpoena on Aug. 15 about Musk's intentions. Musk eventually abandoned his plan to go private on Aug. 25 after CNBC reported Morgan Stanley was planning to be retained to seek financing for a transaction, suggesting funding for a deal hadn't been secured.
Morton joined the company as chief accounting officer with the expectation he would eventually take over for Deepak Ahuja as CFO, the person said. Ahuja returned to the CFO position in 2017 after retiring in 2015.
A person familiar with the circumstances around Morton's departure said that he did not bring any of these concerns up to Tesla at any time, including in his exit interview.
“I want to be clear that I believe strongly in Tesla, its mission and its future prospects, and I have no disagreements with Tesla's leadership or its financial reporting,” Morton wrote in his statement today.
Morton is the latest in a wave of execs who have recently left or announced they would leave the company, including engineering leader Doug Field and communications chief Sarah O'Brien. Also on Thursday, Bloomberg reported that HR chief Gaby Toledano, currently on leave, would not be returning to the company.
Tesla declined to comment beyond the official filing. Morton couldn't immediately be reached for comment.
Elon needs a vacation, not a couple of days at Burning Man, says NYT's Jim Stewart
5 Hours Ago | 06:10
Morgan Stanley: Tesla’s autonomous ride-sharing network is worth one-tenth of Waymo
Morgan Stanley has valued Tesla’s autonomous vehicle ride-sharing business, which does not yet exist, at $17.7 billion, about one-tenth of Waymo’s value, yet still above GM Cruise, the investment firm said in a research note published Tuesday. The $17.7 billion valuation, or about $95 per Tesla share, is notably lower than the $244 a share… Continue reading Morgan Stanley: Tesla’s autonomous ride-sharing network is worth one-tenth of Waymo