Latest news with #Musk-related
Time of India
a day ago
- Business
- Time of India
Musk-Trump breakup exposes cracks in Wall Street's meme casino
Live Events Bloomberg You Might Also Like: Musk-Trump breakup puts billions in SpaceX contracts at risk, jolting US space program Bloomberg It took less than a day for the great Donald Trump-Elon Musk split to reshape debates over billionaire power and influence in American another level, the breakup was a reminder of something else: the perils of personality-driven investing, a growing and lucrative business for the Wall Street bankers cranking out, rapid-fire, a never-ending array of new financial products. Few have done more to fuel these gambling spirits than the president and the world's richest a matter of hours, a loosely connected web of Musk-linked trades — and a few tied to Trump — cratered as the public feud escalated. Dogecoin sank 10%; a publicly traded fund dangling SpaceX exploration for retail consumption slid 13%; leveraged bets amping up returns on Musk-related ventures lost a quarter of their value or more. Shares of Trump's media company spat — ignited by the deficit-expanding tax bill threatening Tesla's electric-vehicle subsidies — cooled on Friday and asset valuations steadied. But by then, investors had gotten the message loud and clear. 'You can go from being an incredible beneficiary one moment and then being bludgeoned the next,' said Peter Atwater, founder of Financial Insyghts. 'Anytime you are investing in something that is as crowded as these Elon Musk-related vehicles, you are going to be either the beneficiary or the victim of his standing.'The breakup drama was backdrop to a comparatively sleepy week in regular markets. The S&P 500 ended the week 1.5% higher, while the extended FANG index — which doesn't include Tesla — hit a record. The dollar touched its lowest level in about two years. Ten-year Treasury yields jumped more than 10 basis points this week, as Friday's jobs data eased concerns about an imminent economic for the casino crowd on Thursday, things got ugly. These investors aren't just trading stocks or crypto, they're paying for proximity to dominant personalities. Tesla is a financial avatar for Musk's ambitions. Trump's political resurgence reverberates across his media company, his fast-expanding crypto empire and MAGA-theme products across the broader industry. Each post, endorsement and headline is a chance to pull capital into the retail investment hasn't just drawn in risk junkies — it's built an entire product architecture, from speculative bets to more conventional funds tied to the fortunes of billionaire Musk. Vehicles like Baron Partners Fund and the Ark Innovation ETF got caught up in the selloff before markets rebounded on sharp rout — its worst week since 2023 — was fueled by projections that the company faces a $1 billion hit to full-year profit, if it loses a tax credit from Trump's bill. Meanwhile, the president's businesses pushed deeper into the financial ecosystem. His media company was one step closer to launching the Truth Social Bitcoin ETF, the latest in a string of crypto-linked assets and 'MAGA'-themed investment those with the nerve to dive into the newfangled, the gains have been eye-popping at times. A closed-end fund with Space-X exposure, Destiny Tech100 Inc., surged about 500% in just a month after the Nov. 5 election. Dogecoin went from 15 cents to above 43 cents in November, when Ark surged by 26% in less than two spirits have run high since the pandemic but soared anew after Trump buddied up with Musk on the campaign trail and won the White House, backed by the $250 million the Tesla founder spent on the meme ethos was cemented when Musk's program to cut government spending took its name from a crypto token born as a canine-themed joke.'I put him in the separate category of the Zeus of personality cults, beyond anything that has ever happened,' said Jay Hatfield, CEO of Infrastructure Capital Management. 'We've never had anybody running a major company like him.'The result has been a speculative spasm that, until this week, was often insulated from old-school markets convulsed by Trump's on-again-off-again tariff threats. An element of the craze that infuriates Wall Street's old guard — the near-impossibility of forming a valuation case around things like crypto tokens and public vehicles for private holdings — proved a virtue at a time of rampant economic uncertainty.'Retail traders — the bro trade component of retail — they've never really cared much about fundamentals,' said Dave Mazza, Chief Executive Officer at Roundhill Investments who in February launched a Tesla-focused product. 'These folks really believe in the narrative on stocks like Tesla and Palantir Technologies Inc. Some of these names are really dependent upon a dream premium and not what they actually do for business.'Another case in point: 16% of ETFs launched this year offer single-security strategies that use either leverage or options overlay, according to Bloomberg Intelligence's Athanasios Psarofagis. That's a record. Many target retail investors who trade aggressively, take on higher risk, and use them for dip buying.'The rise of degen leverage and derivative products on the highest profile stocks makes a mockery of the idea that the market is 'allocating capital' in any rational way,' says Dave Nadig, an ETF industry expert. 'It's immensely profitable. That's why very few people are even suggesting there are any issues in ETF land.'
Yahoo
a day ago
- Business
- Yahoo
Musk-Trump Breakup Exposes Cracks in Wall Street's Meme Casino
(Bloomberg) -- It took less than a day for the great Donald Trump-Elon Musk split to reshape debates over billionaire power and influence in American capitalism. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. At another level, the breakup was a reminder of something else: the perils of personality-driven investing, a growing and lucrative business for the Wall Street bankers cranking out, rapid-fire, a never-ending array of new financial products. Few have done more to fuel these gambling spirits than the president and the world's richest man. In a matter of hours, a loosely connected web of Musk-linked trades — and a few tied to Trump — cratered as the public feud escalated. Dogecoin sank 10%; a publicly traded fund dangling SpaceX exploration for retail consumption slid 13%; leveraged bets amping up returns on Musk-related ventures lost a quarter of their value or more. Shares of Trump's media company slid. The spat — ignited by the deficit-expanding tax bill threatening Tesla's electric-vehicle subsidies — cooled on Friday and asset valuations steadied. But by then, investors had gotten the message loud and clear. 'You can go from being an incredible beneficiary one moment and then being bludgeoned the next,' said Peter Atwater, founder of Financial Insyghts. 'Anytime you are investing in something that is as crowded as these Elon Musk-related vehicles, you are going to be either the beneficiary or the victim of his standing.' The breakup drama was backdrop to a comparatively sleepy week in regular markets. The S&P 500 ended the week 1.5% higher, while the extended FANG index — which doesn't include Tesla — hit a record. The dollar touched its lowest level in about two years. Ten-year Treasury yields jumped more than 10 basis points this week, as Friday's jobs data eased concerns about an imminent economic slowdown. But for the casino crowd on Thursday, things got ugly. These investors aren't just trading stocks or crypto, they're paying for proximity to dominant personalities. Tesla is a financial avatar for Musk's ambitions. Trump's political resurgence reverberates across his media company, his fast-expanding crypto empire and MAGA-theme products across the broader industry. Each post, endorsement and headline is a chance to pull capital into the retail investment machine. It hasn't just drawn in risk junkies — it's built an entire product architecture, from speculative bets to more conventional funds tied to the fortunes of billionaire Musk. Vehicles like Baron Partners Fund and the Ark Innovation ETF got caught up in the selloff before markets rebounded on Friday. Tesla's sharp rout — its worst week since 2023 — was fueled by projections that the company faces a $1 billion hit to full-year profit, if it loses a tax credit from Trump's bill. Meanwhile, the president's businesses pushed deeper into the financial ecosystem. His media company was one step closer to launching the Truth Social Bitcoin ETF, the latest in a string of crypto-linked assets and 'MAGA'-themed investment vehicles. For those with the nerve to dive into the newfangled, the gains have been eye-popping at times. A closed-end fund with Space-X exposure, Destiny Tech100 Inc., surged about 500% in just a month after the Nov. 5 election. Dogecoin went from 15 cents to above 43 cents in November, when Ark surged by 26% in less than two weeks. Speculative spirits have run high since the pandemic but soared anew after Trump buddied up with Musk on the campaign trail and won the White House, backed by the $250 million the Tesla founder spent on the election. The meme ethos was cemented when Musk's program to cut government spending took its name from a crypto token born as a canine-themed joke. 'I put him in the separate category of the Zeus of personality cults, beyond anything that has ever happened,' said Jay Hatfield, CEO of Infrastructure Capital Management. 'We've never had anybody running a major company like him.' The result has been a speculative spasm that, until this week, was often insulated from old-school markets convulsed by Trump's on-again-off-again tariff threats. An element of the craze that infuriates Wall Street's old guard — the near-impossibility of forming a valuation case around things like crypto tokens and public vehicles for private holdings — proved a virtue at a time of rampant economic uncertainty. 'Retail traders — the bro trade component of retail — they've never really cared much about fundamentals,' said Dave Mazza, Chief Executive Officer at Roundhill Investments who in February launched a Tesla-focused product. 'These folks really believe in the narrative on stocks like Tesla and Palantir Technologies Inc. Some of these names are really dependent upon a dream premium and not what they actually do for business.' Another case in point: 16% of ETFs launched this year offer single-security strategies that use either leverage or options overlay, according to Bloomberg Intelligence's Athanasios Psarofagis. That's a record. Many target retail investors who trade aggressively, take on higher risk, and use them for dip buying. 'The rise of degen leverage and derivative products on the highest profile stocks makes a mockery of the idea that the market is 'allocating capital' in any rational way,' says Dave Nadig, an ETF industry expert. 'It's immensely profitable. That's why very few people are even suggesting there are any issues in ETF land.' --With assistance from Vildana Hajric and Isabelle Lee. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Automotive
- Yahoo
Tesla Shares Climb on Fundstrat Buying Signal
Tesla (NASDAQ:TSLA) stock jumped 5.9% Friday after Fundstrat's Tom Lee called the recent pullback a good entry point, arguing that Elon Musk's public split with Donald Trump helps the EV maker shed political baggage. Lee told CNBC that disassociating Tesla from MAGA controversies ingratiates Musk with the broader U.S. and global audience, offsetting backlash that drove TSLA's shares down roughly 30% year-to-datemaking it the worst-performing large-cap stock of 2025. Despite that slide, Tesla remains the 10th largest company by market capitalization, thanks in part to Q1 deliveries of 387,000 vehicles and guidance for 1.8 million units in fiscal 2025. Lee noted that while Trump could threaten to cancel Musk-related federal contracts, Tesla's services are too integral to be cut, and he believes the political drama, not just a general EV slowdown, has weighed on the stock. Indeed, broader EV demand has cooled after booms in 2021 and 2022, but Tesla's scaleits 65% gross margin on Model 3 and Y vehicles and expanding energy-storage businessstill offers upside as manufacturing costs decline. Investors seized on Lee's framework, sending TSLA higher even as U.S. EV sales dipped 8% in April amid rising interest rates and supply-chain hiccups. Why It Matters: Today's bounce suggests that, despite headwinds from politics and a softened EV market, analysts see value in Tesla's long-term growth trajectory, production scale and margin profile, making it an attractive entry for contrarian investors betting on a rebound. Investors will be watching Tesla's Q2 delivery figures, due in late July, and any updates on Musk's broader political positioning to gauge whether this rally can extend. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Automotive
- Yahoo
Tesla Shares Climb on Fundstrat Buying Signal
Tesla (NASDAQ:TSLA) stock jumped 5.9% Friday after Fundstrat's Tom Lee called the recent pullback a good entry point, arguing that Elon Musk's public split with Donald Trump helps the EV maker shed political baggage. Lee told CNBC that disassociating Tesla from MAGA controversies ingratiates Musk with the broader U.S. and global audience, offsetting backlash that drove TSLA's shares down roughly 30% year-to-datemaking it the worst-performing large-cap stock of 2025. Despite that slide, Tesla remains the 10th largest company by market capitalization, thanks in part to Q1 deliveries of 387,000 vehicles and guidance for 1.8 million units in fiscal 2025. Lee noted that while Trump could threaten to cancel Musk-related federal contracts, Tesla's services are too integral to be cut, and he believes the political drama, not just a general EV slowdown, has weighed on the stock. Indeed, broader EV demand has cooled after booms in 2021 and 2022, but Tesla's scaleits 65% gross margin on Model 3 and Y vehicles and expanding energy-storage businessstill offers upside as manufacturing costs decline. Investors seized on Lee's framework, sending TSLA higher even as U.S. EV sales dipped 8% in April amid rising interest rates and supply-chain hiccups. Why It Matters: Today's bounce suggests that, despite headwinds from politics and a softened EV market, analysts see value in Tesla's long-term growth trajectory, production scale and margin profile, making it an attractive entry for contrarian investors betting on a rebound. Investors will be watching Tesla's Q2 delivery figures, due in late July, and any updates on Musk's broader political positioning to gauge whether this rally can extend. This article first appeared on GuruFocus.
Yahoo
25-04-2025
- Automotive
- Yahoo
Elon Musk's DOGE detour, robots, tariffs, and more: Tesla earnings takeaways
Tesla's (TSLA) first-quarter earnings report was less about profits and more about pivots. The automaker and its CEO, Elon Musk, didn't want to talk as much about the numbers — maybe for good reason — as much as they wanted to talk about the future. Investors may have been hoping for answers about falling demand, increased competition, and EV price wars, but they instead heard Musk talk about a future where Tesla wasn't primarily a car company. He touted the firm's energy division — a sort of side business, as things stand now — and looked to a future in which Tesla's factories are powered by robots. And, of course, Musk talked about two things top of mind for investors: his much-maligned role in the Department of Government Efficiency (DOGE) and the impact tariffs will have on the company's business. Here are some of the key takeaways from the company's earnings report as investors look to Tesla's winding road ahead. The first thing Musk talked about on Tuesday's earnings call actually had nothing to do with Tesla and everything to do with his role in the Trump administration's Department of Government Efficiency. Musk told investors that he would scale back his role in DOGE — which has slashed the federal employee workforce, among other drastic cost-cutting maneuvers — to a day or two a week starting sometime next month, or as much as President Donald Trump wants him around. The timing is fortuitous: Musk is a special government employee, which means he's subject to specific ethics rules and can only work 130 days or fewer during a year. Tesla's stock soared after Musk's announcement that he'd be recommitting himself to his CEO role. Wedbush Securities analyst Dan Ives said in an analyst note that this was a 'turning point' for the automaker as the CEO looks to 'turn the corner from this dark chapter.' Ives wrote that this move was an off-ramp 'out of the Trump White House in our view as the global brand damage, political firestorm, and perfect storm chaos over the past few months' will come to an end. Musk's affiliation with Trump and far-right politics has sent Tesla's reputation cratering. Sales are down of both new and used cars; protestors are targeting the company's vehicles and facilities; and other brands are leapfrogging Tesla in sales numbers. So Musk's move to create distance from the president was much needed for the automaker, though its reputation might never fully recover. Tuesday's first-quarter earnings report almost seems to have been buried by all the Musk-related hoopla, and the EV maker is probably OK with that. Because earnings were bad. Very bad. Tesla's Q1 revenue was the lowest the company has seen in three years — $19.3 billion, which was down 9% compared with the same period last year. The company reported that net income sank 71%, and its earnings were a double miss in both adjusted earnings-per-share and revenue. Total auto revenue fell 20% year-over-year during the period. It's hard not to point to buyers' negative associations with Musk as a cause, although Tesla's earnings report didn't mention the CEO once. Instead, Tesla said the drop in profits was a result of factory retooling needed to make a revamped version of its popular Model Y SUV, along with price cuts and sales incentives that put the brakes on the company's revenue. Immediately after the earnings release, Tesla's stock was up just 1%, its smallest post-earnings bump since October 2020. Tesla left a return-to-growth forecast out of its earnings report, saying it would revisit its 2025 guidance in a Q2 update. 'It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,' Tesla said in its earnings release. 'While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment.' The 'variety of factors' Tesla alluded to in its earnings report include Trump's tariffs — and the resulting trade war fallout. Trump slapped a 25% tariff on auto imports — on top of 10% universal tariffs and levies on auto parts still to come in early May. While Tesla is less exposed to tariffs on imported cars because it manufactures the vehicles it sells in the U.S. in Texas and California, the company relies on other countries for its parts. Mexico supplies more than 20% of the automaker's parts. On Tuesday's call, Musk said Tesla is in a relatively good spot compared with other U.S. automakers because of its 'localized supply chains.' He said Tesla is the 'least-affected car company with respect to tariffs, at least in most respects' and referred to Tesla as the most 'vertically integrated car company.' Musk has previously been a vocal critic of the Trump administration's tariff policies and referred to Peter Navarro, one of the plan's architects, as 'dumber than a sack of bricks.' On Tuesday, Musk distanced himself from the administration on its trade plan. 'The tariff decision is entirely up to the President of the United States,' he said. 'I will weigh in with my advice. I've been on the record many times saying lower tariffs are a good idea for prosperity. I'll continue to advocate for lower tariffs rather than higher tariffs. That's all I can do.' He added, '[Trump] will listen to my advice. But then it's up to him, of course, to make his decision.' While Tesla may be in a better tariff position than most automakers, the company faces heavy tariffs on one of the bright spots on its earnings report: its energy business, which grew 67% last quarter. Musk said that wing of the company faces an 'outsized' impact from the tariffs because it sources the lithium iron phosphate (LFP) battery cells for its Megapack batteries from China. 'We're in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S.,' he said, but added that Tesla can 'only serve a fraction of our total installed capacity' with its local equipment. 'We've also been working on securing additional supply chain from non-China-based suppliers, but it will take time,' he said. Investors had been hoping for some news about how Tesla plans to keep pace with lower-cost Chinese competitors such as BYD (BYDDY), what moves the company is making to keep up with Alphabet's (GOOGL) Waymo in the robotaxi market, and what the deal is with the Cybertruck. But what Musk really seemed to want to talk about was Tesla's robots. The CEO said the humanoid Optimus robots are coming along and he expects the scale-up to be faster than any other of the company's products — a million units per year in less than five years. Musk claimed there would be thousands of the robots working in Tesla factories by the end of the year. The company said it plans to begin building the robots on a pilot production in California later this year. Still, Musk warned that China's new trade restrictions on rare earth magnets is affecting the production of the robots — but the company is working through the issue with Beijing. Musk promised that the Optimus robots would help produce a time of 'sustainable abundance for all.' 'This is a happy future,' he said. For the latest news, Facebook, Twitter and Instagram. Sign in to access your portfolio
