Business

Musk’s all-nighters at Twitter raise concern for Tesla investors

Published

2 years ago

November 15, 2022

SAN FRANCISCO, Nov 15 (Reuters) – In 2018, Elon Musk was working through the night and sleeping at Tesla Inc’s (TSLA.O) factories in California and Nevada as the company struggled to ramp up production of the Model 3.

On Monday, Musk said he had worked through the night at Twitter’s San Francisco headquarters and would keep “working & sleeping here” until the social media platform – which he recently acquired for $44 billion – was fixed.

A self-described “nanomanager,” Musk’s penchant for working long hours in moments of crisis has been a well-known part of his brand. But the billionaire’s deep dive into Twitter, after a protracted buyout that he tried to scrap, has some Tesla investors worried about his capacity to focus on his role as CEO of the world’s most valuable carmaker.

“Tesla investors are going to be frustrated,” said Gene Munster, managing partner at venture capital firm Loup Ventures. “He’s probably going to spend more time on Twitter than any Tesla investor feels comfortable about.”

Musk, who is expected to testify in court on Wednesday about whether a $56 billion pay package at Tesla is justified, did not respond to a Reuters email seeking comment.

He tweeted on Monday “I have Tesla covered too,” saying he planned to work at the electric vehicle maker for part of this week. Tesla has an office in Palo Alto, California, and a factory in Fremont, California.

Tesla’s shares have dropped by 50% since early April, when he disclosed he had taken a stake in Twitter. Sales of Musk’s own Tesla shares – totaling $20 billion since he disclosed his Twitter stake – have added to the pressure.

Tesla faces a growing list of challenges from demand concerns in China to a regulatory probe of the claims it makes about the abilities of its “Autopilot” driver assistance technology in the United States.

So far this month, Musk’s tweets about his efforts to reboot Twitter have accounted for more than two-thirds of his postings on the platform he acquired in October, according to a Reuters tally.

Tesla accounted for just 3% of his tweets from Nov. 1 to Nov. 15, down from an average of almost 16% over the previous eight months.

Munster said he expects Twitter to consume Musk’s attention for the next six to 12 months, adding that Tesla was a more developed company than in earlier days and less immediately reliant on Musk.

In recent days, Musk has said his workload has increased significantly after his Twitter buy.

“I have too much work on my plate,” he said by video link to a business conference in Indonesia on Monday, saying he was working “from morning till night seven days a week.”

“Once Twitter is set on the right path, I think it is a much easier thing to manage than SpaceX or Tesla,” Musk said earlier this month at the Baron investment conference, referring to the aerospace company which he also runs.

Tesla investor Ross Gerber, a strong supporter of Musk, said on Tuesday that Tesla needed to find a deputy for its multitasking CEO. “I think he’s finally reached a point where he’s really challenging himself. I think they need to find the right person. And quite frankly, they just don’t have that person.”

‘MINIMAL TIME’

The Tesla board has expressed concerns about Musk’s commitment to SpaceX and several smaller companies. Tesla board chair Robyn Denholm said in a 2018 email that the “minimal time” Musk was spending at Tesla was “becoming more and more problematic,” according to court documents related to his pay trial. A Tesla shareholder says the board failed in approving a $56 billion pay package for him without demanding his full-time attention.

Another board member, Ira Ehrenpreis, noted at trial that Musk was paid for results, not time spent, a view echoed by Musk in a 2021 deposition. At Tesla’s annual meeting in August, Musk responded to a question about “key-man risk” by acknowledging his colleagues, saying “We do have a very talented team here. So I think Tesla would continue to do very well even if I was kidnapped by aliens or went back to my home planet maybe.”

Musk has proven his doubters wrong before and some early investors say they expect him to be up for the Twitter challenge. “When you get an entrepreneur that does all that he’s done, we should just be kissing his feet. The guy is awesome,” billionaire investor Tim Draper told Reuters.

But others have lost patience.

“Musk has managed to do what the bears have unsuccessfully tried for years – crush Tesla’s stock,” Wedbush analyst Daniel Ives, a long-time Tesla bull, said in a note last week.

Ives called Twitter an “albatross,” a “distraction” and a “money pit” for Musk. “The Twitter circus show is slowly starting to impact the pristine EV brand of Tesla,” he said.

Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru
Additional reporting by Aditya Soni and Yurvaj Malik in Bengaluru
Editing by Kevin Krolicki, Ben Klayman, Peter Henderson and Matthew Lewis

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Business

Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

Published

3 days ago

November 12, 2024

Anne Joseph

TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

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Business

Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

Published

3 days ago

November 12, 2024

Anne Joseph

Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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Business

RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

Published

3 days ago

November 12, 2024

Anne Joseph

TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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