Tesla Crashes After Earnings, Barclays Bears Bad News, and Wendy's Stock Tastes Good
Electric shock is the best way to describe the feelings of Tesla (NASDAQ: TSLA) shareholders Thursday. The stock dropped more than 11%, despite the cool electric car company's expectations-beating first-quarter earnings report. Tesla drove $713 million in revenues compared to the $699 million expected, and increased profit margins on the 7,535 Model S cars produced.
What does Tesla want? China ridin' shotgun. Tesla introduced its first cars to China in the past couple of months, and claims they were "greeted enthusiastically" in Beijing and Shanghai. Next up, it plans to build those cars in China within the next three years. (We assume without child labor or the absurd Apple-factory working conditions.)
The takeaway is that Wall Street thinks Tesla's like a teenager with a learner's permit going 110 mph on the Jersey Turnpike -- it's too fast too quickly. The stock is up 227% in the last year, making the 10-year old company already half as valuable as the 100-year old auto legend General Motors, as measured by market capitalization (the number of shares times the share price). That reality got investors thinking that maybe they've been buying up the stock a bit too much.
The investment bank is a "drag" on returns, according to the CEO -- (but the 120 million pound sponsorship of England's Premier Soccer League is OK, mate?). The investment bank is the riskiest business, so regulators require Barclays to keep tons of cash reserves for a possible downturn -- hence the "drag" remark.
The old CEO was a white-collar-wearing investment banker. Robert Diamond capped the growth of Barclay's i-bank with the big acquisition of Lehman Brothers in '08, or what remained of it after the infamous bankruptcy. But excessive pay and a LIBOR-rigging scandal while Britain's economy struggled, hurt Barclays' reputation. Diamond was forced by regulators to step down -- so Thursday's announcement is like an an official abandonment of his legacy.
Investors approve, but Donald Trump is probably trying to become the official "fire-er" for Barclays. During the past decade, banks have grown into gargantuan beasts with a part in so many different markets... so Wall Street actually approved of Barclays' plans to consolidate and refocus, giving it a 7.4% stock boost Thursday.
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The article Tesla Crashes After Earnings, Barclays Bears Bad News, and Wendy's Stock Tastes Good originally appeared on Fool.com.Jack Kramer has no position in any stocks mentioned. Nick Martell has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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