Tesla, now strongly linked to Bitcoin, drops in value as cryptocurrency plummets - CBC.ca | Canada News Media
Connect with us

Business

Tesla, now strongly linked to Bitcoin, drops in value as cryptocurrency plummets – CBC.ca

Published

 on


Shares in Tesla Inc., were set to plunge into the red for the year on Tuesday, hit by a broad sell-off of high-flying technology stocks and the fall of bitcoin, in which the electric car maker recently invested $1.5 billion US.

Early Tuesday morning, Tesla was down over six per cent in U.S. premarket deals after an 8.5 per cent drop during the previous session.

The firm led by Elon Musk has had a stellar ride since 2020, which it began at about $85 per share, before reaching the $900 mark on Jan. 25.

Currently trading at about $673 in pre-market transactions, the stock has lost 25 per cent from its peak, which is above the 20 per cent level that technically defines a bear market.

Bitcoin plummeted as much as 17 per cent on Tuesday as investors grew nervous at sky-high valuations, triggering the liquidation of leveraged bets and sparking a sell-off across cryptocurrency markets.

The world’s biggest cryptocurrency was facing its biggest daily drop in a month, falling to as low as $45,000.

The drop took its losses to over a fifth from a record high of $58,354 hit on Sunday and underscored the volatility of the emerging asset — though it is still up around 60 per cent this year.

“The kinds of rallies we’ve been seeing aren’t sustainable and just invite pullbacks like this,” said Craig Erlam, senior market analyst at OANDA. “It was an extremely overbought market.”

Representation of the bitcoin virtual currency standing on a computer motherboard is seen in this illustration from Feb. 2, 2018. (Dado Ruvic/Illustration/Reuters)

Ether — the world’s second largest cryptocurrency by market capitalization, which often moves in tandem with bitcoin — also dropped more than 20 per cent to $1,410, down over 30 per cent from last week’s record peak.

Bitcoin’s high volatility, critics say, is among reasons that it has so far failed to gain widespread traction as a means of payment — an expectation that has in part fuelled its rally.

Tesla investment could backfire, trader says

A Germany-based trader said he was “taking chips off the table” on Tesla as its $1.5 billion investment in the cryptocurrency could “backfire now.”

Among the factors contributing to the rise of the stocks is surging retail and institutional demand for “environmental, social, and governance” (ESG) friendly investments.

“There is a lot of reasons — purely from a sustainability angle — to hold Tesla. It is part of that transformation towards a more sustainable business model,” Valentijn van Nieuwenhuijzen, chief investment officer at asset manager NN IP told Reuters on Friday.

However, Musk’s decision to invest in bitcoin could weigh on Tesla’s ESG rating, he said.

The billionaire has been criticized for lauding bitcoin prior to Tesla’s purchase of the cryptocurrency.

His role in encouraging a retail frenzy in the shares of U.S. video game chain GameStop and driving up the price of the meme-based digital currency dogecoin have also come under fire while being acclaimed by a large fan base.

Analysts at Barclays noted that there had been a drop of conversations about the electric car makers in Reddit’s WallStreetBets forum, which could explain some of the loss of appetite for the stock.

“With only 2-3 total submissions on each of the past several days, we remain below the trend in attention that has come along with big returns jumps in the past,” the analysts said in a note.

Other analysts have also cautioned against investing in the stock which remains one of the most expensive on the S&P 500 index at 163 times its 12-month forward earnings.

While investing in bets against the company’s stock have backfired spectacularly in the past, short interest in Tesla shares still stood at 5.5 per cent, according to Refinitiv data.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

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

Published

 on

 

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.

___

Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

Source link

Continue Reading

Business

Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

Published

 on

 

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)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Business

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

Published

 on

 

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)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version