Ready to upgrade your next vacation?
Then make sure you rent from Hertz, and ask to rent the Tesla!
Today, Tesla Inc. (TSLA) added more than $100 to its share price, crossing above $1 trillion for the first time.
The surge came after Hertz announced it will be buying 100,000 Tesla electric vehicles. Starting in November you should be able to rent the Tesla model 3 at many of the busiest airlines.
It can be difficult to justify a $1 trillion price tag for this iconic car manufacturer.
The company is expected to earn a record $7.77 per share in 2022. So at Monday’s closing price of $1,025, the stock trades at more than 130 times expected profits.
That’s a hefty price tag regardless of how fast you expect TSLA to grow in the future. And yet the s
Tesla’s surge is a perfect example of how momentum can drive prices far above values that can be reasonably justified.
Or maybe it’s an example of how investors can spot value long before traditional metrics can see the opportunity.
Time will tell.
In the meantime, congratulations to all the TSLA bulls out there (including Cathie Wood’s ARKK Innovation fund). And make sure you rent the Tesla next time you’re visiting a new city!
Today’s links include Bitcoin updates, why copper is the new toilet paper, tumbling social media stocks and more!
Rent the Tesla and Put Down the Phone
- Reuters: Snap tumbles Friday, Apple privacy features to blame.
- Apple’s privacy updates rolled out in June & July.
- With less data, advertisers spending less on SNAP platform.
- Analysts cut targets sending stock sharply lower.
- WSJ: Paypal abandons Pintrest takeover.
- PYPL shares fell following takeover rumors, rebounded on Monday.
- Shareholders reacted negatively to deal rumors.
- WSJ: Tesla hits $1T after big order by Hertz
- Starting in November, Hertz customers will be able to rent a Model 3.
- Shares of TSLA crossed above $1,000 – and its market cap above $1T.
- Electric vehicles will comprise more than 20% of Hertz fleet.
Budget Deficits and Bankruptcies
- AP: US budget deficit its $2.77 trillion.
- The 2021 deficit was the second highest on record (behind 2020).
- Prior to the coronavirus crisis, the record deficit was $1.4T in 2009.
- CBO expects deficit to fall to $1.15T in 2022.
- Bloomberg: Evergrande avoids bankruptcy with last minute bond payment.
- The $83.5 million payment buys Evergrande another week of life.
- Evergrande’s bond due March of 2022 is priced at 26-cents on the dollar.
- The company has more than $300 billion in liabilities
It’s a Crypto World Out There
- CoinDesk: Bitcoin ETF pumps volume for CME crypto futures.
- New Bitcoin fund BITO boasts $570 million in assets.
- BITO places 40.2% in October and 31.2% in November contracts.
- Trading volume for Bitcoin futures contracts surged to record highs.
- CoinDesk: CME replaces Binance as worlds largest Bitcoin futures platform.
- Thanks to BITO’s purchases — and knock-on effects, CME volume surged.
- There may be arbitrage opportunities between Binance, CME and BITO prices.
- Bloomberg: Meme crypto Shiba Inu becomes 11th biggest crypto coin.
- SHIB up 50% in 24 hours Sunday.
- Change.org asking Robinhood to list SHIB, petition gets 300,000 signatures.
- Dogecoin also advanced and now has a $34 billion market cap.
An Abundance of Shortages
- Kitco: Copper is the new toilet paper.
- Supply / demand imbalance for copper pushed prices to nearly $10,000 / lb.
- Warehouse inventories have fallen to lowest level since 1974.
- LME taking unusual actions to ensure liquidity in the copper market.
- Bloomberg: Wheat hits new highs – world appetite growing, supplies shrink.
- 3-month U.S. forecast predicts more drought in key wheat regions.
- Fertilizer prices up double on the year.
- Higher wheat prices can boost cost of livestock feed.