Jul 1, 2019

Tesla's stock rebound may not last

Photo: Justin Sullivan/Getty Images

Tesla's stock is beginning to recover after a brutal start to the year, rebounding about 25% from its June nadir as optimism about second-quarter vehicle deliveries has picked up steam.

The state of play: CEO Elon Musk's message to shareholders that there is "not a demand problem," and June 25 email to employees saying Tesla is "on track to set an all-time record" for deliveries have also helped stabilize the stock. But investors would be wise to sit out any celebration, Charley Grant at WSJ writes.

  • "For starters, record deliveries would hardly guarantee a profit. Tesla managed a net profit margin of less than 2% in the fourth quarter of 2018.... [T]here is reason to believe margins have shrunk since then."
  • "We believe that Tesla has an incentive … to 'move the metal;' in other words, prioritize deliveries over margins and pricing, which it appears to have done this quarter," Barclays analysts wrote last week.

Tesla also now faces more competition on its higher-end Model S and Model X cars, which have much higher profit margins than the mass market Model 3, from Jaguar and Audi.

  • Further, Grant notes, U.S. federal tax credits for Tesla buyers will be reduced again in the U.S. starting today to just $1,875, compared with $7,500 last year.

Go deeper: What Tesla knows about you

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Coronavirus breaks the telecom bundle

Reproduced from Park Associates "Broadband Services in the U.S." report; Note: 2019 survey was conducted in Q3, with 10,059 respondents and a ±1% margin of error; Chart: Axios Visuals

Consumers are adopting stand-alone broadband services at a much higher rate than just two years ago, and analysts predict that the economic downturn prompted by the COVID-19 outbreak will accelerate the trend.

Why it matters: With a recession looming, consumers may look to cut pay TV service in favor of more robust standalone internet packages once they're free to leave their homes.

America's funeral homes buckle under the coronavirus

Illustration: Aïda Amer/Axios

Morgues, funeral homes and cemeteries in hot spots across America cannot keep up with the staggering death toll of the coronavirus pandemic.

Why it matters: The U.S. has seen more than 10,000 deaths from the virus, and at least tens of thousands more lives are projected to be lost. The numbers are creating unprecedented bottlenecks in the funeral industry — and social distancing is changing the way the families say goodbye to their loved ones.

Navarro memos warning of mass coronavirus death circulated in January

Image from a memo to President Trump

In late January, President Trump's economic adviser Peter Navarro warned his White House colleagues the novel coronavirus could take more than half a million American lives and cost close to $6 trillion, according to memos obtained by Axios.

The state of play: By late February, Navarro was even more alarmed, and he warned his colleagues, in another memo, that up to two million Americans could die of the virus.

Go deeperArrowUpdated 2 hours ago - Health