Gini Olom

Kamis, 02 Mei 2019

Tesla raising $2 billion with Elon Musk planning to buy $10 million in stock - CNBC

GP: Elon Musk, chief executive officer of Tesla Inc., speaks during an event at the site of the company's manufacturing facility in Shanghai, China, on Monday, Jan. 7, 2019.

Qilai Shen | Bloomberg | Getty Images

Tesla said in a filing on Thursday that it would raise up to $2 billion, with $650 million coming in the form of new equity and $1.35 billion in convertible notes.

CEO Elon Musk signaled the intent to buy about $10 million of the company's stock in the new offering. The total equity offering is for 2.7 million shares of Tesla. Musk's purchase would be 41,896 shares. Before the offering, Musk owned about 20% of Tesla's outstanding shares, worth about $12.6 billion, according to FactSet.

The move comes only a week after Musk deferred on questions about the company raising capital any time soon.

"I don't think raising capital should be a substitute for making the company operate more effectively," Musk told shareholders on the company's quarterly conference call. "I do think there is some merit to raising capital, but this is sort of probably about the right timing."

Musk was pressed by Wall Street analysts on the call on the topic, as Tesla burned through around $2 billion in cash in the first quarter of 2019.

Tesla shares fell earlier in premarket trading when the company put out an initial filing indicating it would be offering a mix of debt and equity securities. The stock then reversed course and was last trading 5.7% higher when a second filing revealed details of the offering, including Musk's interest in buying a block of the new shares.

Musk's purchases have been reliable short-term buy signals for the stock in the past, according to InsiderScore.com. Following the last 5 purchases by Musk, the shares were higher on average by 41% in the next three months, according to InsiderScore.

Shares of the controversial electric automaker have been under pressure lately, down nearly 30% from the beginning of the year. The stock's surge following the filing came from "the fact that they ripped off the band aid and decided to raise the capital," Dan Ives, managing director of equity research at Wedbush Securities, told CNBC.

"There was growing fears that this company was going to need incremental cash going to the second half of the year. For the first time, they listened to investors and the math doesn't lie in terms of what they needed to do," Ives said. "Now there's a relief because the liquidity issue and the finance concern could be put to rest in the near term."

The offering is being underwritten by Goldman Sachs, Citigroup, Bank of America, Deutsche Bank, Morgan Stanley, Credit Suisse, Societe Generale and Wells Fargo.

– CNBC's Yun Li contributed to this report.

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2019-05-02 12:18:40Z
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Tesla files for offering to raise capital - CNBC

NEW YORK, NY - APRIL 4: Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City. A federal judge will hear oral arguments this afternoon in a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) that seeks to hold Musk in contempt for violating a settlement deal. (Photo by Drew Angerer/Getty Images)

Drew Angerer | Getty Images News | Getty Images

Tesla filed for a mixed shelf offering for an undisclosed amount on Thursday, a week after Chief Executive Officer Elon Musk suggested a capital raise could be imminent.

Many analysts had predicted the electric-car maker would need to raise funds for its expansion, including building a factory in Shanghai, the upcoming Model Y SUV, and other projects.

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2019-05-02 11:10:18Z
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Tesla files for a shelf offering to raise capital - CNBC

Drew Angerer | Getty Images News | Getty Images

Tesla filed for a mixed shelf offering for an undisclosed amount on Thursday, a week after Chief Executive Officer Elon Musk suggested a capital raise could be imminent.

Many analysts had predicted the electric-car maker would need to raise funds for its expansion, including building a factory in Shanghai, the upcoming Model Y SUV, and other projects.

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2019-05-02 11:08:36Z
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VW profits meet expectations, warns of rising economic risks - CNBC

The Volkswagen logo is displayed at Serramonte Volkswagen on November 18, 2016 in Colma, California.

Justin Sullivan | Getty Images

Volkswagen reported first-quarter earnings in line with expectations on Thursday, as the automaker attempts to increase the pace of its transformation.

The German firm posted operating profit of 3.9 billion euros ($4.4 billion) for the first three months of the year. That compared with operating profit of 4.2 billion euros a year earlier. Analysts polled by Reuters had expected first-quarter operating profit to come in at 3.9 billion euros.

Volkswagen, which is still battling to recover from a 2015 scandal over emissions test cheating, also said it had decided to take a 1 billion euro charge in the first quarter, as a result of legal risks.

"It is certainly very unfortunate that we had to book more provisions but we assess every single risk and exposure we have continuously and it was the point in time to make those provisions," Frank Witter, chief financial officer of Volkswagen, told CNBC's "Squawk Box Europe" on Thursday.

The company confirmed its full-year guidance and said it expected sales to increase as much as 5%. It projected an operating return on sales between 6.5% and 7%.

Revenue advanced 3.1% to 60 billion euros for the first three months of 2019, despite a drop in deliveries.

The company did not provide a net profit figure.

'Optimistic but realistic' over potential US tariffs

Earlier this year, Volkswagen CEO Herbet Diess said the carmaker would need to redouble its efforts in 2019 in order to meet its ambitious annual targets.

Diess told the Financial Times in February that the biggest risk to Volkswagen's 2019 profit would be potential tariffs from President Donald Trump's administration.

At the time, he estimated the worst-case scenario regarding potential U.S. tariffs could cost around 2.5 billion euros a year — roughly 13% of expected earnings.

"We certainly hope that the trade disputes can be resolved but it is no secret that 100% of the Porsche cars are being exported from Europe to the United States," Witter said.

He explained that approximately 70% of all Audi products were sold in the U.S., while for Volkswagen passenger cars it was a very small percentage being exported from Europe to the U.S. since most of their cars were built in North America.

"So, we still hope for the best, we do whatever we can but we are not party to the negotiations … We continue to be optimistic but also realistic," Witter said.

In February, Trump said he would impose tariffs on cars imported from the European Union if U.S. talks with the bloc can't produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.

Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.

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2019-05-02 05:56:08Z
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Rabu, 01 Mei 2019

Here's the one word from Jerome Powell that has people raising their eyebrows - CNBC

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., Sept. 26, 2018.

Andrew Harrer | Bloomberg | Getty Images

It only took one word from Fed Chair Jerome Powell on inflation to send the markets reeling, and that word was "transitory."

Traders have been speculating that recent weaker inflation readings would concern the Federal Reserve so much that it would cut interest rates later this year. Powell knocked that idea, by explaining that the central bank still sees the weakness as the result of "transitory" factors, such as portfolio management services, lower apparel prices and airfares.

The Fed's target on inflation is 2%, and the core PCE rate watched by the Fed fell to a surprising 1.6% in the first quarter.

"We suspect transitory factors may be at work," Powell said, adding inflation should return to the Fed's target over time, and then be symmetric around its objective. Powell was commenting at a news briefing, following the Fed's two-day meeting.

"If we did see inflation running persistently below, that is something the committee would be concerned about and something we would take into account when setting policy," he said.

Powell said the Fed believes a number of issues were holding back inflation but it's likely they are transitory like the change in cellphone rates that impacted inflation several years ago. "We're going to be watching these things carefully to see if that's the case," he said.

Treasury yields fell, the dollar strengthened and stocks sold off after Powell's comment, and also after he described some of the risk factors impacting the economy as moderating.

"Transitory was word of the day," said Michael Schumacher, director rates at Wells Fargo. "If you look at pricing for fed funds futures for the end of 2019, it moved by about nine basis points. The market is looking a lot more reasonable."

Before the Fed briefing, the fed funds futures were pricing 25 basis points of easing by December.

Schumacher said the market also reacted to the fact that Powell stressed that the Fed is not moving in either direction at this point, though it sees improvement in the global economy and less threat from risk factors, like trade and Brexit.

"They're in the middle at this point, not sitting on either end of the teeter totter, which is what they had been telling people, but the market didn't really believe it," he said.

Stocks were flattish before the Fed statement, and turned negative when Powell began to speak about inflation.

The yield on the 2-year Treasury note jumped to 2.30%. The 2-year correlates closely to expectations for Fed policy, and its low before the Fed's 2 p.m. statement was 2.20%.

"The market was pricing in this rate cut. They want a rate cut and this was basically Powell saying, 'sorry but we're not.' You have gold down, the dollar rallying and Treasurys selling off," said Peter Boockvar, of Bleakley Advisory Group

On Tuesday, President Donald Trump criticized Fed policy, saying it was holding back the U.S. economy. He said the Fed should cut by 1 percentage point and restart a program of quantitative easing, a policy tool used during the financial crisis.

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2019-05-01 20:19:20Z
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Apple surges 6% day after earnings beat—here's what 4 experts predict will come next - CNBC

Wall Street's coming around on Apple.

Shares of the iPhone maker soared more than 6% on Wednesday after reporting earnings the previous evening, topping $1 trillion in market capitalization. Apple beat analysts' expectations on earnings and revenue for the fiscal second quarter, as well as their outlook for the company's third quarter.

The results empowered Apple bulls, particularly those who believe in the company's mission to tilt its business more toward services like iCloud and Apple Music, which grew 16% year over year.

Here are four Wall Street experts' reactions to the quarter:

Gene Munster, managing partner at Loup Ventures, saw several things that made him bullish:

"This company is an earnings powerhouse, and I want to put that into perspective. We just usually gloss over that [earnings per share] number. They're going to earn more money over the next five years — this is what we estimate — compared to overall FANG combined, or call it equal amount. So this is underappreciated, I think, by investors, and an important part: GAAP earnings powerhouse. The second is I want to put a finer point on China. It did improve. Specifically, the iPhone was the pain point last quarter. We estimate that the iPhone – this is not a reported number – was down 40%, 4-0, in the December quarter, and it was likely down 28% in the March quarter, so that was kind of the magnitude of improvement. And the last is the significance of the buyback. [...] This buyback … is a huge deal. And just to put it into perspective, if they make good on their promise — we're going to be listening on the call for the timing on this — to be net cash neutral, if they make good on that promise over the next five years, that theoretically should raise the stock price by about 25%. I won't go through the details and the math on that, but those are my three biggest takeaways. They're less about this quarter. If I had to add a fourth, which is an important one, it's this is probably the best play on 5G, and we're going to get tired of hearing about Apple and 5G, but stay tuned for more on that."

Guy Adami, director of advisor advocacy at Private Advisor Group and a trader on CNBC's "Fast Money," said the latest quarter should push market watchers to reevaluate Apple's valuation:

"I'm not going to pretend to be disingenuous. For me to pretend I've been some raging Apple bull — I have not. Most of the people on the desk have; I haven't. But one thing we've said is as revenues continue to grow in services, and now they're 19.7%, the valuation of Apple has to get better, and that [is], I think, what's happening now. The question you have to ask yourself is, as that number of services goes from 20% to 25[%], what is the right multiple for Apple? I would submit it's close to a market multiple, maybe 18 times. That gets you to a $235 stock, thereabouts. If you want to give them a bit of a discount, 16, 16.5 [times], it's fairly priced here. But I think that's the calculus that you have to do going out of these numbers now."

Chatham Road Partners' director of research, Colin Gillis, wasn't as impressed as others:

"[Apple CEO] Tim Cook lacks founder's flame, and he's going to be known, at least in my book, as the buyback king. He's a buyback CEO. His No. 1 accomplishment has been returning that $300 billion to shareholders. And fine, that's quite an accomplishment, but it also means you had no ideas. You had no ideas to better deploy that cash. And I think in 10 years from now, we may look at this cycle and the cash flow that has been generated from the iPhone and the lack of innovation to be able to deploy that cash and be regretful that Apple wasn't able to come up with new revenue streams."

Jeremy Bryan, senior portfolio manager at Gradient Investments, remained strategic:

"The thesis is still right for us. It's up 30% year to date. It's back to about a five-year high in valuation, so we think it was just prudent to take some off the table. The report looks good. We think the numbers look good. We still own a portion of it. But I think it was still prudent to take some off."

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2019-05-01 15:49:46Z
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S&P 500 soars to record as Apple becomes $1T company - Fox Business

The S&P 500 hit an all-time high Wednesday as surging Apple shares turned the iPhone maker into a $1 trillion corporation.

Apple reached that milestone when, in intraday trading, shares reached $212.07.

Ticker	Security	Last	Change	%Chg
AAPL	APPLE INC.	214.57	+13.90	+6.93%

Stocks also got a boost from a surprisingly strong ADP report on April job creation. ADP said U.S. employers created 275,000 jobs, far higher than the 180,000 analysts had expected.

Wall Street's gains came ahead of an interest rate announcement by the Federal Reserve, which is expected to hold the cost of money steady.

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Without Apple, which had added about 100 points to the Dow Jones Industrial Average in midday trading, the index would be slightly negative.

Energy companies and Google were weighing on indexes.

Ticker	Security	Last	Change	%Chg
GOOGL	ALPHABET INC.	1,176.83	-22.13	-1.85%
XOM	EXXON MOBIL CORPORATION	79.53	-0.75	-0.93%
CVX	CHEVRON CORP.	119.05	-1.01	-0.84%
OXY	OCCIDENTAL PETROLEUM CORPORATION	58.30	-0.58	-0.99%

Crude oil fell to $62.94 per barrel as U.S. inventories rise sharply. The Energy Information Administration said the nation's crude oil inventory jumped by 9.9 million barrels last week to 470.6 million barrels.

Treasury yields were fractionally lower ahead of the Fed's announcement on interest rates, which was set for 2 p.m. ET.

Ticker	Security	Last	Change	%Chg
I:DJI	DOW JONES AVERAGES	26620	+27.09	+0.10%
SP500	S&P 500	2949.59	+3.76	+0.13%
I:COMP	NASDAQ COMPOSITE INDEX	8135.879677	+40.49	+0.50%

Investors are coming off a big trading day: The S&P 500 on Tuesday notched a record high for the third straight session on unexpectedly strong quarterly results from General Electric and biopharmaceutical company Pfizer.

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Many bourses outside the U.S., including those in China, Korea and Japan, as well as continental Europe, were closed Wednesday for May Day observances.

One exception is Britain’s FTSE 100, which slipped 0.03 percent.

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2019-05-01 15:44:32Z
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