Weekly StockWatch: Automakers Sales, Musk-Twitter Saga, Peloton Layoffs & More

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Musk's U-Turn on Twitter

The billionaire CEO of Tesla reversed course again this week, in another episode to the never-ending saga over his effort to buy Twitter. A few months back, he had decided to terminate the acquisition agreement over the dispute around the platform's spam/fake accounts and Twitter had responded with a lawsuit to enforce the deal.

This Tuesday and ahead of the upcoming court trial, Mr Musk made another U-turn, offering to buy Twitter on the previously agreed upon price of $54.20/share [1]. However, the completion may be still tricky, as there is probably a high level of distrust between the two sides.

In light of this development, the Delaware Court of Chancery postponed the trial until October 28, in order to permit the two sides to close the transaction. Twitter however, did not want the stay of the litigation on the basis that "Defendants' agreement will not ensure that the transaction closes fast enough". [2]

TWTR.us had surged 22% on Tuesday on report that Mr Musk wanted to complete the merger, but the rally fizzled out over the next couple of days.

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Automakers Sales

The auto industry was in the spotlight this week, as legacy manufacturers and electric vehicle start-ups announced their delivery figures, for the month of September and the third quarter.

The Ford Motor Company saw its US sales slump in September, to 142,644 units, in an overall strong third quarter. The firm's F-150 Lightning electric sold 6,464 units in Q2, wihile the F-Series as whole sold 167,962. [3]

Segment competitor Chevrolet Silverado, of General Motors (GM), had 117,198 US deliveries during the same period. GM's total sales grew 24% year-over-year in the third quarter, to 555,580 vehicles. [4]

On the Chinese EV start-up front, NIO (NIO.us) handed over 31,607 vehicles in Q3, which marked record highs and a significant increase on both a quarterly and a yearly basis. The figure includes 221 ET5 mide-sized sedans, its latest model, deliveries of which started last month. [5]

Rival Xpeng (XPEV.us) did not perform as well, since its saw its deliveries fall below the 30K mark, for the first in one year. The latest and fourth model in its lineup, the G9 flagship SUV, which was unveiled last month, accounted for 184 units. [6]

Earlier in this month, EV king Tesla Motors Inc, had announced record deliveries of 343,830 units [7], but markets seemed underwhelmed. Furthermore, the deliver/production widened, compared to previous quarters, cussing some concern.

Peloton Layoffs

The fitness equipment, technology and media company, known mostly for its internet-connected stationary exercise bikes, saw its popularity peak during the pandemic lockdowns. However, things have turned south since and the firm has been facing difficulties and has also garnered some negative publicity.

Peloton Interactive has been making efforts to turn things around and announced on Thursday announced another round of layoffs and the the elimination of approximately 500 jobs, as part of the final restructuring phase [8]. Ahead of the official press release, the firm's CEO spoke to the Wall Street Journal and is reported to have given Peloton another six months to turn around, after which, it may not be viable.

Mr McCarthy, who took over early this year, later clarified that "there is no timeclock", adding that "if my comments to the WSJ suggested otherwise, then I misspoke, as that is simply not true". He also stressed the he joined the firm "for the comeback story", not to sell it. [8]

At the beginning of the week, the embattled firm announced a plan to put Peloton Bikes across Hilton's entire U.S. hotel portfolio. Within the current year, nearly all 5,400 Hilton-branded hotels will have at least one such exercise bike in every fitness center. [10]

Last month, it had also partnered with DICK'S Sporting Goods, under which the sports retailer will sell Peloton's hardware –such as bikes and treadmills – and select accessories. This will be done via branded shops inside more than 100 DICK'S store across the US and its ecommerce platform. [11]

PTON.us collapsed in 2021 and the current year is not good either, although it has somewhat stabilized. The new quarter started with new all-time lows, but thing quickly improved and pushed for the first profitable week in a month.

United Airlines Electric Plans

The Chicago-based based company, is one the largest airlines in the world with approximately 70,000 employees, having flown 36 million passengers in 2021 to more than 300 destinations worldwide. [12]

A little over a year ago, United Airlines Holdings Inc had drawn attention with its investment in the electric aircraft startup Heart Aerospace and the conditional agreement to buy 100 electric planes [13]. The two companies provided an update around this venture, at this week's CNBC ESG IMPACT Conference.

CEO of United Airlines Ventures (UAV), the arm responsible for investing in new technologies and sustainable solutions, said that United aims to have electric planes in the skies by 2030. Mr Leskinen expects them to fly regional routes in that timeframe, initially of 200 miles or less. [14]

In another aspect of its electric aspirations, United Airlines announced last week, another $15 million investment in Eve Air Mobility and a conditional purchase of 200 of its four-seat
electric aircrafts
(plus 200 options). These electric vertical take-off and landing vehicles are intended as flying taxis, with deliveries expected to begin as early as 2026. [15]

Next Week (October 10-14)

The last earnings season of the year gets underway next week, with big banks traditionally being one the first to report their quarterly financial results. JP Morgan Chase, Wells Fargo and Citigroup, all report on Friday before market open.

A day ahead, on Thursday, Delta Air Lines releases its latest results, after a solid performance in the previously reported quarter.It had achieved a 99% Revenue recovery from the pre-pandemic levels and expects to increase 1%-5% in the third quarter. [16]

For more insights on Delta and other companies thta will be on my radar over the coming months, you can can read the Top 10 US Stocks for Q4 2022 Part 1 and Part 2 series.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 07 Oct 2022 https://www.sec.gov/Archives/edgar/data/1418091/000110465922078413/tm2220599d1_ex99-p.htm

2

Retrieved 07 Oct 2022 https://courts.delaware.gov/Opinions/Download.aspx

3

Retrieved 07 Oct 2022 https://s201.q4cdn.com/693218008/files/doc_downloads/2022/10/September-Sales-Release-FINAL.pdf

4

Retrieved 07 Oct 2022 https://investor.gm.com/static-files/557a4748-4bff-44df-b514-2ae06afddd96

5

Retrieved 07 Oct 2022 https://ir.nio.com/news-events/news-releases/news-release-details/nio-inc-provides-september-and-third-quarter-2022

6

Retrieved 07 Oct 2022 https://ir.xiaopeng.com/news-releases/news-release-details/xpeng-announces-vehicle-delivery-results-september-and-third-1

7

Retrieved 07 Oct 2022 https://ir.tesla.com/press-release/tesla-vehicle-production-deliveries-and-date-financial-results-webcast-third-quarter

8

Retrieved 07 Oct 2022 https://investor.onepeloton.com/news-releases/news-release-details/statement-peloton-ceo-and-president-barry-mccarthy

10

Retrieved 07 Oct 2022 https://investor.onepeloton.com/news-releases/news-release-details/hilton-and-peloton-team-enhance-travel-wellness-experience

11

Retrieved 07 Oct 2022 https://investor.onepeloton.com/news-releases/news-release-details/peloton-and-dicks-sporting-goods-partner-offer-peloton-equipment

12

Retrieved 07 Oct 2022 https://www.united.com/en/us/newsroom/corporate-fact-sheet.html

13

Retrieved 07 Oct 2022 https://www.united.com/en/us/newsroom/announcements/electric-aircraft-set-to-take-flight-by-2026-under-new-agreements-with-united-airlines-ventures-breakthrough-energy-ventures-mesa-airlines-heart-aerospace-2653765004

14

Retrieved 07 Oct 2022 https://www.cnbcevents.com/news/cnbc-transcript-heart-aerospace-chairman-ceo-founder-anders-forslund-and-united-airlines-ventures-president-mike-leskinen-speak-with-cnbcs-phil-lebeau-live-during-cnbcs-esg-i/

15

Retrieved 07 Oct 2022 https://www.united.com/en/us/newsroom/announcements/2022-09-8-United-Invests-Another-15-Million-in-Electric-Flying-Taxi-Market-with-Eve

16

Retrieved 30 Nov 2022 https://s2.q4cdn.com/181345880/files/doc_financials/2022/q2/Delta-Air-Lines-Announces-June-Quarter-2022-Results_vFinal-(1).pdf

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