Musk Master of Misdirection | The Daily Peel | 7/11/22

Market Snapshot

Futures were flat Friday morning, and we couldn’t stop reading about internal thrash within the Twitter deal as well as our favorite meme stock. The 10-year yield hovered around 3%, and Crude climbed back above $104. BTC and ETH held steady around 20.5k and 1100 bucks.

Markets were mixed. The Dow was down 0.15%, the S&P was down 0.08%, and the Nasdaq finished up 0.12%.

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Let’s get into it.

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What's Ripe

Tesla ($TSLA) — I think Tesla and Elon simps would actually prefer if Elon stopped pulling his money out of Tesla and focused more on Tesla’s growth.

On Friday, shares of $TSLA were up 2.27%. The stock has mounted a comeback, climbing over 10% last week. Rumor has it that June was a great month for production.

We will see how their bottom line looks during their next earnings call.

Enphase Energy ($ENPH) — People have been claiming that solar is the future for decades, and Enphase is part of that crowd.

You’d think that when oil rips, solar energy companies too might rip, as more expensive oil would drive increased demand for solar power at lower price points.

Shares of $ENPH climbed 4.65% on Friday.

What's Rotten

Disney ($DIS) — Disney is beaten down. After political thrash with the state, C-19 troubles, and controversy with local municipalities, the stock is down 38% YTD.

Friday, the backslide continued, and shares lost another 1.61%. Even with a battered stock, is it still the happiest place on earth?

Illumina Inc ($ILMN) — Biotech and genetic innovation are struggling of late, and $ILMN is on that train to nowhere itself.

Shares retreated 2.55% on Friday as the company is more or less going out of favor with Wall Street analysts.

The consensus rating is a HOLD, with more than two-thirds of its coverage thinking that the stock is more or less only going to move sideways in the near future.

Thought Banana

Musk Master of Misdirection — The Twitter deal is likely the only thing that Musk has pulled out of in a long time. (That’s a joke, you can laugh.)

But in all seriousness, there are many new opinions about who will win in court, what Elon is thinking, whose lawyers are better, etc., etc.

My thought is that Elon is using this as a negotiation technique. I’m not an attorney, but it would seem that he is up a paddle with a creek in his a** from a legal standpoint, given the analysis I’ve heard from multiple legal professionals on different cable news networks.

But this would be a huge legal battle, with exorbitant legal fees. It also would thrash the Twitter stock in the meantime, and it could take years to fight in court.

I think that Elon is basically bluffing here and that he wants to get a better deal now that he’s had a slight peek up Twitter’s kimono.

What does this mean for Twitter’s stock? Well, who knows. I wouldn’t touch it with a ten-foot pole.

Musk is irrational. He makes deals by the seat of his pants based on instinct, preferring gut feeling over due diligence.

That’s fine. If it works for him, which it obviously has in building multiple multi-billion dollar organizations from the ground up, he should roll with it. It’s just not my style, so no judgment here.

If you’re invested in Twitter, I’m not sure what advice I would give you, even if I gave financial advice.

There is a silver lining to this whole thing: it makes for solid entertainment in the media. Here’s to hoping the laughs keep coming for as long as Elon can drag this out.

Wise Investor Says