Musk Buys 9.2% of Twitter, Declines to Joins Board, TWTR up over 20%
"Twitter Inc.’s shares slid after Elon Musk decided not to join its board, a stunning twist to a week-long saga that has captivated the tech community and touched off renewed speculation about the company’s future.
The abrupt reversal ignites renewed speculation about Musk’s intentions for Twitter since disclosing he had taken a stake of just over 9 per cent -- becoming the social media giant’s largest individual shareholder. If he doesn’t join the board, Musk would not be subject to an agreement to keep his stake at no more than 14.9 per cent." - read more on BNN here
Breaking Thoughts: Elon now looms over Twitter's board and management, demanding more free speech protections, edit buttons, and more features for its subscription business in order to diversify it away from a primarily ads based model.
Elon's hope is that his involvement as the largest shareholder will help steer the main global public square away from the cancel culture and censorship demands that have plagued the platform in recent years. Elon, like most democratically minded western individuals, believes that free speech and open debate are the keys to a functioning democratic society. This is inline with his views of a positive space faring, technological and free future for humanity.
For shareholders of TWTR, they could be pleased with the stock's run up since the announcement, but may need to be wary of higher volatility ahead as Musk is a controversial figure who can spark both love & outrage. In the long run, alot of what Musk is advocating, especially revenue diversification, should be good for Twitter's results.
Tesla Opens its Texas Giga Factory with a Bang
"Tesla opened its Austin, Texas-based Gigafactory on Thursday, a crucial step in the company’s delayed plans to begin production of its electric Cybertruck. To celebrate the opening, Tesla held an event, billed as a “Cyber Rodeo,” to which it invited 15,000 people to listen to live music, eat food, and pay homage to Elon Musk and his company.
“We are really entering a new phase of Tesla’s future,” Musk told the audience. Clad in a black cowboy hat and aviator sunglasses, Musk said he was excited to begin working on Cybertruck production at last. “I can’t wait to see this baby in production, it’s going to be epic.” Tesla has said it expects to make 1.5 million vehicles in 2022, after producing slightly less than 1 million vehicles last year — a 50 percent increase." - read more on the Verge here
Shopify Aims for a 10 to 1 Stock Split
"Shopify Inc. announced a number of proposed changes to its governance and share structure on Monday, including a new class of shares it wants to create to ensure its founder and chief executive, Tobi Lütke, can be shielded from short-termism.
In a release, the Canadian e-commerce company announced it wants to create a new Founder share that would effectively ensure Lütke controls 40 per cent of Shopify’s total voting power.
Shopify also announced its board of directors has proposed at 10-for-1 stock split. The company’s shares have been taken for a wild ride during the pandemic. After soaring almost 367 per cent from mid-March 2020 to their high last November, they shed almost two-thirds of their value since then through the close of trading Friday." - read more on BNN here
Breaking Thoughts: Stock splits tend to increase shareholder returns and lead to relative outperformance over the medium term compared to the general market. Shopify is increasing liquidity for all shareholders, making its options cheaper and solidifying the founders influence for the long term.
These should be seen as generally positive for the future prospects of the world's 2nd largest E-commerce marketplace. Historically, Canadian tech founders have had limited influence once their companies reach a certain scale, leading to massive slow downs in innovation and growth.
Hopefully, Tobi Lutke is able to successfully emulate his peers in Silicon Valley (such as Bezos, Zuckerberg, Musk, Dorsey etc.) by maintaining visionary leadership.
Major Earnings This Week
Tuesday April 12:
Albertsons (ACI): Expected Q4 earnings of $0.64 per share
CarMax (KMX): Expected Q4 earnings of $1.27 per share
Wednesday March 13:
Bed Bath & Beyond (BBBY): Expected Q4 earnings of $0.04 per share
Blackrock (BLK): Expected Q1 earnings of $9.08 per share
Delta Air Lines (DAL): Expected Q1 earnings of $-1.32 per share
Infosys (INFY): Expected Q4 earnings of $0.19 per share
JPMorgan Chase (JPM): Expected Q1 earnings of $2.69 per share
Shaw Communications (SJR): Expected Q2 earnings of $0.40 per share
Thursday March 17:
Citigroup (C): Expected Q1 earnings of $1.63 per share
Goldman Sachs (GS): Expected Q1 earnings of $9.07 per share
Morgan Stanley (MS): Expected Q1 earnings of $1.76 per share
Progressive (PGR): Expected Q1 earnings of $1.23 per share
State Street (STT): Expected Q1 earnings of $1.48 per share
TSMC (TSM): Expected Q1 earnings of $1.30 per share
Wells Fargo (WFC): Expected Q1 earnings of $0.81 per share
Major IPOs Expected This Week
None
See you next week!
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The Market News Reel for this week! Get the most important market news & updates for the week ahead! Major headlines, excerpts from news sources are shown above. "Breaking Thoughts" section is purely our opinion.