Tonight: Musk's Twitter obsession isn't Tesla's only problem. Plus: 2022's final installment of Food News. Let's get into it. By Allison Morrow |
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Tesla shares hit their lowest level in more than two years on Tuesday, a fittingly grim milestone to cap a brutal year in which the car maker's stock is down nearly 70% — a decline that's wiped out $720 billion from its valuation. Shares were up around 3% Wednesday, thanks in part to a rush of bargain shoppers hoping to buy the dip. The EV maker has also dropped out of the 10 biggest public US companies by market capitalization for the first time in more than two years. What's going on? A common refrain in the current Tesla narrative is that its CEO, Elon Musk, is a too-easily-distracted mega-billionaire who's stretched thing and neglecting his most successful business in favor of tinkering with his money-losing social media plaything, Twitter. And while of all that is true, it's hardly the only reason Tesla has struggled this year, my colleague Chris Isidore explains. Musk clearly puts off some would-be Tesla buyers, and investors have been rattled by his sale of Tesla stock to help finance his $44 billion Twitter deal. But there's more to it than just the Musk yuck factor. See here... Demand is slipping, forcing Tesla to cut prices. - "Tesla clearly is starting to see demand cracks in China and in the US at a time that EV competition is increasing across the board," said Dan Ives, an analyst with Wedbush Securities. (Even Ives, a longtime Tesla bull, recently slashed his price target for the stock to $175 from $250.) "The price cuts that Tesla enacted was the straw that broke the camel's back on the stock."
Macro challenges abound - The global could tip into recession next year, which would (of course) hurt car sales.
- That pain won't be unique to Tesla, but a downturn is always going to hit growth stocks hardest.
Tesla's sky-high valuation has always been suspect. - It's not clear Tesla was ever worth the trillion-dollar valuation it achieved at the start of the year.
- At its peak, Tesla was worth more than the 12 largest automakers on the planet combined, despite having a fraction of the sales of any of them. Investors were enamored with the prospect of a company that would disrupt the global auto industry. They bet on the hype, pushing the stock up 743% in 2020 alone.
- Tesla's trillion-dollar valuation has fallen to about $350 billion today.
Elon and Tesla have a habit of overpromising and underdelivering. - That sky-high valuation was based on promises that Musk made about future products, many of which came years after they were originally promised.
- Take the Cybertruck, unveiled three years ago with promises that production would start in 2021. Now it is slated to start production next year, with a ramp-up in production in 2024, putting it years behind Ford and Rivian, both of which have electric pickups available for purchase today.
- "When people say he's a genius and innovator, it's based on all his promises he never lives up to," said Gordon Johnson, one of the biggest Tesla critics among analysts.
See Chris's full report on Tesla and what comes next here. |
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When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX. In an affidavit that emerged Tuesday, Bankman-Fried said he and FTX co-founder Gary Wang borrowed more than $546 million from the hedge fund, Alameda Research, which they used to purchase the Robinhood shares via a holding company primarily controlled by Bankman-Fried. The upshot: Bankman-Fried's stake in Robinhood is now at the center of a separate, multinational legal battle over the assets associated with his bankrupt crypto empire. |
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In the grand tradition of year-in-review lists, we're taking a look back at the foods we lost in 2022. Foods that delighted, or disgusted, that are now consigned to the garbage heap of history. (At least, of course, until the next marketing scheme revives them for a limited time offer to goose flagging sales…) RIP, Choco Taco This taco-shaped ice cream cone was discontinued in July after nearly four decades of being basically perfect. In announcing its discontinuance, Klondike said that the company has "experienced an unprecedented spike in demand across our portfolio" and that it had to make "very tough decisions to ensure availability of our full portfolio nationwide." After everyone freaked out, though, Klondike left us with a tiny, chocolatey morsel of hope when it said it hopes to bring the Choco Taco back to ice cream trucks "in the coming years." The McRib McDonald's, the undefeated champ of hyping limited-edition crap, teased this fall that the October re-release of the McRib "could be your last chance to taste it." The McRib debuted on McD's menus in the Kansas City region in 1981. It has come back sporadically since, cultivating a devout following. (If I had to bet, I'd say the McRib isn't going away for long.) Ch'King Burger King's take on a fried chicken sandwich barely lasted a year. The Ch'King launched in May 2021, and was quietly eliminated from nationwide menus just 15 months later. The reason: It was too hard to assemble for employees, a huge problem in a business where speed is key. (And if I may offer a diagnosis, the name "Ch'King" wasn't doing it any favors. Who wants to order something that sounds like they're sneezing?) But 2022 wasn't just about saying goodbye to these indulgences. We also got to celebrate the re-birth of Taco Bell's Mexican Pizza, which Nightcap has been advocating for for at least two years. Here's my colleague Jordan Valinsky with the full list of foods we said farewell to this year. RELATED: Starbucks is making changes to its rewards program, requiring members to spend more to earn some popular freebies. |
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✈️ United and American Airlines have placed price caps on flights to key cities to help customers of rival Southwest get home. 📱 TikTok has been banned from electronic devices managed by the US House of Representatives, according to an internal notice sent to House staff. 👀 It's December, which means it's time for Wall Street analysts to issue their 2023 market predictions — something they are, historically, really bad at. |
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