Now Musk Wants a Million Self-Driving Teslas
There he goes again, as Reagan would say. Elon Musk and his outlandish predictions that he spouts out in order to get people to buy Tesla (NASDAQ:TSLA) stock even though the company keeps losing money. God bless him. Now he says that 1 million self driving Tesla robotaxis will be on the road by next year. The stock is down over 3% yesterday. Because of the added expense of putting 1 million self driving cars on the road, Musk now expects Tesla to keep not making money, but after that, the sky is the limit.
“Between now and when the robotaxis are fully deployed throughout the world, the sensible thing for us is to maximize the number of autonomous units made and drive the company toward cash-flow neutral,” Musk said.
“Once the robotaxi fleet is active, I would expect to be extremely cash-flow positive. The fundamental message that consumers should be taking today is that it’s financially insane to buy anything other than a Tesla. It will be like owning a horse in three years,” he said, in an insult to equines and cowboys everywhere.
Housing Market Slumping
Supply is increasing, but along with supply increasing you have price decreases, as in the law of supply and demand. In Salt Lake City for example, listings jumped 53% in March from a year earlier and transactions fell 21%. This might be in preparation for a fall in housing prices, which in a rising interest rate environment could be pretty destabilizing for the rest of the economy as it was last time. We’ll have to see. Sellers aren’t willing to lower their asking prices yet, so that means the amount of housing transactions is going to fall, until and unless prices fall, or buyers have more money to meet the asking price. All quite simple economics really, but financial media has to make it all so complicated. Of course, in order for people to have more money, mortgage rates have to at least stabilize. They’ve been rising slowly in fits and starts since 2013, from a low of 3.3% to now 4.17%, reaching highs since then of 4.94% just recently. (BATS:ITB)
“Buyers are back, but they’re picky,” said Daryl Fairweather, chief economist of Redfin. “In order to get back to a balanced market, prices have to come down more.”
Beyond Meat is Going Beyond Private, to Public
Beyond Meat, a Bill Gates and Tyson Food (NYSE:TSN) backed venture, is going public and expects to price its IPO at between $19 and $21 a share, for a total market cap of about a billion dollars. Founder Ethan Brown, who founded the company in 2009, explained that the process works by running plant matter through a biological system to make meat. “What we have done is figure out a way to take those same type of materials from plants and run them through a process of heating, cooling and pressure to create a piece of meat. So, you’re getting essentially the same things in terms of proteins, fats and water, but it’s coming directly through a system that comes from plants versus going through the animal.” The company will trade under the symbol BYND.
Speaking of IPOs, Starbucks Out of Luckin in China
Starbucks (NASDAQ:SBUX) Chinese rival Luckin has announced plans to go public in the United States, but instead of plant-based meat, they’ll be selling plant-based coffee. It plans to list on the Nasdaq, despite being only an 18-month old company. It has 2,300 coffee shops across the country and plans to open another 2,500 by the end of 2019. No word on when the IPO will happen and how much it will raise, but the company has already raised hundreds of millions from international investors including Blackrock (NASDAQ:BKCC)
Trump Doesn’t Want Congress to Peek Into His Financial Bedroom
President Donald Trump is suing to block congress from subpoenaing his financial records. After the Mueller report fell flat, Democrats are now trying to dig up personal dirt on him in order to keep up the fight. Democrats allege that Trump has inflated or deflated or maybe just flated his financial statements for “politically improper” purposes. As to what is politically proper, no word on that. The subpoena was issued by Rep. Elijah Cummings. Trump’s lawyers say that “Chairman Cummings’ subpoena is invalid and unenforceable because it has no legitimate legislative purpose. Its goal is to expose Plaintiffs’ private financial information for the sake of exposure, with the hope that it will turn up something that Democrats can use as a political tool against the President now and in the 2020 election.” Sounds fun.