- The Weekly Buzz 🐝 by Blossom
- Posts
- 📉 Tesla Crashes 9% After a Disappointing Robotaxi Event
📉 Tesla Crashes 9% After a Disappointing Robotaxi Event
Plus, TD stock plummets after pleading guilty in historic US money-laundering case...
TOP STORY
📉 Tesla Crashes 9% After a Disappointing Robotaxi Event
😬 This week, Tesla investors held their breath with eager anticipation for the long-awaited ‘robotaxi event’ that Elon hyped up to be “the most significant moment for Tesla since unveiling the Model 3 nine years ago.”
⏰ The event was supposed to happen in August but was delayed to October to give teams more time, and since then, Tesla‘s stock rose over 25% in excitement for the big event…
😭 Well, on Thursday, the event finally took place and is being called ‘a massive disappointment’.
📉 On Friday, Tesla plummeted nearly 9% - shedding $60B in market cap - so let’s take a look at what was announced, what went wrong, and what the future looks like for the tech giant…
🤖 Robots, Robotaxis, and Robovans
First off, here’s a quick summary of what was announced:
🚖 Robotaxi
As expected, Elon unveiled the Robotaxi/Cybercab which, unlike other autonomous cars, has no steering wheel or pedals.
Musk says the car will cost ‘below $30,000’ and will be in production by 2026.
Musk also claimed that Model 3s and Model Y’s would be operating autonomously in California and Texas by next year.
🚐 Robovan
In a surprise announcement, Elon also unveiled the Robovan - a larger autonomous vehicle that can fit up to 20 people.
🤖 Optimus Robots
The other big spectacle of the night was the Optimus robot, with Musk describing the robot as a household companion that can ‘basically do anything.’
At the event, the humanoid robots mingled about, served drinks, and danced on a lit-up stage.
Elon estimates that at scale, the Optimus would cost $20,000 to $30,000 and said earlier this year that they would be available to purchase by the end of 2025.
“One of the things we wanted to show tonight was that Optimus is not a canned video… I think this will be the biggest product ever of any kind.”
👀 There are some doubts and debate about whether the Optimus robots were truly autonomous, or being remotely controlled by humans with Lux Capital co-founder Josh Wolfe calling them a ‘parlor trick’.
😢 All ‘Razzle-Dazzle’ with Little Substance
“I’m a shareholder and pretty disappointed. The market wanted more definitive timelines. I don’t think [Elon] said much about anything”
🤷♂️ The biggest feeling among investors was that ‘the ideas were cool’ but lacked the level of detail they were hoping for, with many questions left unanswered, like:
What is the status of the ‘more affordable EV’ Elon previously said would enter production by mid-2024?
What is the business model for a supervised and unsupervised ride-sharing service?
How long will it take Tesla to establish a ride-hailing service similar to Waymo?
Has Tesla made any progress with robotaxi regulators that said in April Tesla hadn’t even contacted them yet?
😰 One of the biggest worries is about Tesla’s approach to self-driving vehicles.
🗺️ While many of the robotaxi competitors like Waymo use LIDAR, which uses laser pulses to create a 3D map around the vehicle, Tesla Robotaxis rely on AI and cameras - a controversial decision that some say will “prove to be a huge mistake” (for a great breakdown on the topic check out this video by The Verge)
📊 To ease these worries, analysts were expecting quantifiable metrics on the improvements to Tesla’s Full Self-Driving, but none have been provided yet.
“The event overall disappointed on a number of areas: a lack of data regarding rate-of-change on FSD/tech, ride-share economics and go-to-market strategy”
That said, not everyone was disappointed, with Bank of America analysts saying, “the event lived up to the hype” and Dan Ives, an analyst from Wedbush and long time Tesla bull, said he “strongly disagrees with the notion that last night was a disappointment.”
Overall, analysts are quite divided on Tesla. According to TipRanks, the average price target is $207.83 (5% below current value), with 11 buy ratings, 16 hold ratings, and 8 sell ratings.
Retail investors are also split, with 46% bullish, 18% neutral, and 36% bearish, according to my Instagram poll (vote on the poll here).
🤷♂️ For those beginners sitting on the sidelines, keep in mind all of this makes Tesla a very risky investment. At the end of the day you’re not really investing in a car company, you’re making a bet on whether you think Elon can deliver on his bold promises.
🚘 Elon’s broken a ton of promises, but he also delivered the Model 3 and a +1,217% return over the past 5 years when countless analysts predicted Tesla’s failure, so I’m not sure what the future holds. As for me, I lean slightly more bearish after the news, but am excited to read everyone else’s thoughts on Blossom!
🌼 The Blossom community was mixed on Tesla, with the stock ranking as the #21st Most Bought and the #22nd Most Sold this week. Tesla is the #5 most held stock in the US and the #7 most held stock in Canada.
PRESENTED BY GUARDIAN CAPITAL
💸 GuardBonds – Don’t Leave Yield on the Table!
🔒 Lock in yields without being locked into a GIC
Investors may be considering locking in today’s yields in advance of further interest rate cuts. We think there’s a better way to do so relative to being trapped in a non-redeemable guaranteed investment certificate (GIC) for the next few years.
💡 GuardBondsTM may be the answer!
GuardBondsTM are a suite of actively managed investment funds with defined maturity dates that offer you access to currently high yields over a defined time horizon.
Unlike high-interest savings accounts or GICs, GuardBondsTM are generally not subject to declining yields as interest rates fall1 due to the ‘buy and hold to maturity’ approach of the underlying positions. GuardBondsTM investors also have full access to their money at any time without penalty, unlike GICs which are primarily non-redeemable.
🧐 Why GuardBondsTM?
Higher total return potential than GICs, HISAs, and Money Market funds if rates decline
A defined maturity date helps to alleviate short-term volatility concerns2
Potentially higher yields than GICs with similar fixed maturities
*See GuardBonds Disclaimer at the end of the newsletter
[1] Assumes that investors hold their investment in the GuardBondsTM fund until its maturity date. The value of the GuardBondsTM fund will fluctuate from day to day, and may be impacted by subscriptions and redemptions, and an investor will be subject to market risks if they sell their units prior to the defined maturity date.
[2] As the high probability of the GuardBonds portfolio of short-term investment grade bonds maturing at par means investors are less likely to experience capital losses.
IN CANADA
🏦 TD stock plummets 9% after pleading guilty in historic U.S. money-laundering case
I reported on the full story back in August, but here’s what’s new:
📉 TD crashed a shocking 9% after being slapped with over $3B in fines, pleading guilty to multiple charges, including conspiracy to violate the Bank Secrecy Act and commit money laundering.
😳 This makes TD Bank the first bank in history to plead guilty to conspiracy to commit money laundering.
😬 TD was hit with a rare asset cap, reserved for the most severe cases, dealing a devastating blow to TD which has long pointed to the US as it’s biggest growth opportunity.
🚨 Authorities say that TD Bank's issues were known at every level of the bank and that bank employees "openly joked" about the lack of compliance.
👨💼 TD’s CEO is set to retire April 2025 after more than a decade as CEO, to be replaced by Raymond Chun, the current Head of Personal Banking
“TD created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one”
IN THE NEWS
🚨 Other Key Headlines This Week
📈 Uber jumped +16% and Lyft +9% after the Tesla robotaxi event underwhelmed investors (full story here).
👗 Aritzia is down -7.5% despite reporting 15% net revenue growth after management lowered expectations for next quarter (see Bradley’s Aritzia earnings breakdown on Blossom)
👑 Costco gold bars have been flying off the shelves as gold prices continue to smash records.
🏦 US Bank stocks rose this week after strong Q3 earnings, with JP Morgan up 5.4% and Wells Fargo up 6.3% (full story here)
🔥 The S&P 500 closed at record highs this week (now up +23% year-to-date) after inflation data increased confidence in a further rate cut in November (full story here)
FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week
👇 Click to see the full post!
Disclaimer from Guardian Capital Group Limited:
This document is for informational purposes only and does not constitute investment, financial, legal, accounting, tax advice or a recommendation to buy, sell or hold a security and should not be considered an offer or solicitation to deal in any product mentioned herein. It shall under no circumstances be considered an offer or solicitation to deal in any product or security mentioned herein. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. It is only intended for the audience to whom it has been distributed and may not be reproduced or redistributed without the consent of Guardian Capital LP. This information is not intended for distribution into any jurisdiction where such distribution is restricted by law or regulation. Please read the prospectus, Fund Facts or ETF Facts before investing. Important information, including a summary of the risks, about each Guardian Capital mutual fund and exchange traded fund (“ETF”) is contained in its respective prospectus. Commissions, trailing commissions, management fees and expenses all may be associated with investments in mutual funds and ETFs. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on a stock exchange. If the units are purchased or sold on a stock exchange, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them. Except as noted otherwise, the indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemptions, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. The rates of return for periods of less than one year are simple rates of return. Performance is calculated net of fees. For ETF Units and mutual funds other than money market funds, unit values change frequently. For money market mutual fund Units, there can be no assurances that these mutual fund Units will be able to maintain their net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund and ETF securities, including money market funds, are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Mutual funds and ETFs are not guaranteed and past performance may not be repeated. The opinions expressed are as of the published date and are subject to change without notice. Assumptions, opinions and estimates are provided for illustrative purposes only and are subject to significant limitations. Reliance upon this information is at the sole discretion of the reader. This document includes information concerning financial markets that was developed at a particular point in time. This information is subject to change at any time, without notice, and without update. This document may also include forward looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Investing involves risk. Equity markets are volatile and will increase and decrease in response to economic, political, regulatory and other developments. The risks and potential rewards are usually greater for small companies and companies located in emerging markets. Bond markets and fixed-income securities are sensitive to interest rate movements. Inflation, liquidity, call, credit and default risks are all associated with fixed income securities. Bonds also entail issuer and counterparty credit risk, and the risk of default. Diversification may not protect against market risk and loss of principal may result. Certain information contained in this document has been obtained from external parties which we believe to be reliable, however we cannot guarantee its accuracy. Guardian Capital LP is the Manager of the GuardBondsTM funds. Guardian Capital LP is wholly-owned subsidiary of Guardian Capital Group Limited, which is a publicly traded firm listed on the Toronto Stock Exchange. For further information on Guardian Capital LP and its affiliates, please visit www.guardiancapital.com. All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.