"Oh My F*cking God," Tesla Shares Hit "Funding Secured" Level of $420
It took 504 days but shares of Tesla have finally reached the "funding secured" level of $420.00 per share. Tesla co-founder and CEO Elon Musk infamously tweeted on August 7, 2018 "Am considering taking Tesla private at $420. Funding secured." He then sent a follow-up tweet saying "Shareholders could either to sell at 420 or hold shares & go private."
Of course, those were lies meant to pump the stock and punish short sellers. Musk was charged with securities fraud and settled with the U.S. Securities and Exchange Commission the following month without admitting or denying the SEC’s allegations. To say Musk got off easy is an understatement.
As part of the settlement, Musk was removed as Chairman of Tesla's board, Musk and Tesla each had to pay $20 million in penalties, Tesla was required to appoint two new independent directors to its board and Tesla had to implement controls and procedures to oversee Musk’s communications.
Shares of Tesla have now gained more than 135% from the June low, which saw the stock hit its lowest level since February 2016. Ever since the June bottom, a wave of events has caused an epic short squeeze in Tesla shares.
Tesla surprised everyone when it reported $143 million in net income during the third quarter. Shares surged as analysts estimated the company would report a loss. Shorts got squeezed further following hype over the new Cyber Truck, despite a metal ball shattering the "armor glass" window during a demonstration. Whether he had approval or not is unknown, but Musk even tweeted updates on the number of pre-orders with the goal of causing shares to squeeze further. Yesterday, Tesla announced banks in China agreed to lend them $1.4 billion to build a Shanghai factory for Model 3 production.
The short squeeze has propelled Tesla to a market capitalization of nearly $75 billion. In comparison, General Motors and Ford have a market capitalization of $53 billion and $37 billion, respectively. Furthermore, General Motors reported $147 billion in revenue last year and $8 billion in net income. Ford reported $160 billion in revenue last year and $3.7 billion in net income. Meanwhile, Tesla—which is most certainly not trading like an automaker, but rather a technology company, reported $21 billion in revenue last year and a net loss of just under $1 billion.
While Musk and Tesla bulls have certainly gotten the last laugh up to this point, the bears of TSLA.Q—which is the group on finance Twitter that believes Tesla is a fraud and worth zero, aren't letting the recent short squeeze sway their opinion of the company. With shares of Tesla hitting a new all-time high yesterday, Musk is clearly taking victory laps. After shares crossed $420 per share, Musk tweeted "Whoa … the stock is so high lol."
Given the ongoing squeeze in shares of Tesla, Musk now likely feels empowered to further taunt the SEC and short sellers. Following the settlement last year Musk tweeted "Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!" Earlier this month Musk tweeted "Bravo, right thing to do! Short selling should be illegal," following the decision by Japan's GPIF to stop lending its shares to short sellers.
While Musk can celebrate shares of Tesla hitting $420 by smoking a joint, it may be in his best interest to try to abide by the terms of his settlement with the SEC. While many believe the SEC is sitting on its hands, Market Crumbs previously detailed how they had their busiest year since 2016. After all, one of the most notable examples of executives blaming short sellers was Enron, which if history repeats itself would turn out to give TSLA.Q the last laugh.
It's about time. Boeing has fired CEO Dennis Muilenburg, effective immediately, as the company continues to deal with the fallout from two fatal 737 MAX crashes. Chairman David Calhoun will become CEO effective January 13, with CFO Greg Smith filling in on an interim basis until then. "The Board determined that a change in leadership was necessary to restore confidence in the company moving forward and that we will proceed with a renewed commitment to full transparency, including effective and proactive communications with the FAA, other global regulators and our customers," Smith said in a statement.
Nothing matters anymore. Back on January 4, Apple slashed its sales guidance for its fiscal first quarter by as much as $9 billion. The guidance cut caused shares of Apple to fall by the most since 2013 and dropped shares to their lowest level since 2017. However, thanks to share buybacks and the Swiss National Bank, shares of Apple hit a new all-time high yesterday and with it, a return of 100% from the January low. The remarkable move has added more than $600 billion to Apple's market capitalization. This is just the latest proof that literally nothing matters in today's markets as long as companies and central banks continue to drive stocks higher.
Christmas, Inc. Saturday saw the largest shopping day in U.S. history, with consumers spending a record $34.4 billion on "Super Saturday," according to Customer Growth Partners. Spending online and in stores for the day was 8% higher than last year and 10% higher than Black Friday. "Paced by the ‘Big Four’ mega-retailers -- Walmart, Amazon, Costco and Target -- Super Saturday was boosted by the best traffic our team has seen in years," said Craig Johnson, president of the retail research firm.
How to turn $1 million into $43 million. As we close out the 2010s, Netflix is the best performing S&P 500 stock this decade with a return of nearly 4,200%. In comparison, the S&P 500 is up about 190% over the same period. Netflix replaced the New York Times when it joined the S&P 500 in 2010. With the streaming wars getting more competitive by the day, it's highly unlikely Netflix will repeat the feat in the 2020s.
DraftKings is hitting the public markets. DraftKings will become a publicly traded company through a $3.3 billion business combination agreement with Diamond Eagle Acquisition Corp. and SBTech. The merger will create the only vertically-integrated pure-play sports betting and online gaming company based in the U.S., according to the press release. DraftKings CEO and co-Founder Jason Robins will lead the combined company, which will rename to DraftKings Inc. and remain listed on the Nasdaq under a new ticker. Institutional investors have committed to investing $304 million at closing, which is expected in the first half of 2020.