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Bill Gates shorts $1.5–2bn Tesla shares

In today’s top stories, Elon Musk reveals that Bill Gates has a short position in Tesla, Australia’s AGL Energy abandons its demerger plans and Lions Gate announces plans to spin off its Starz streaming service. Meanwhile, Barron’s and Citi highlight undervalued stocks to buy the dip.

Gates is shorting Tesla

Elon Musk has confirmed in a series of tweets that Bill Gates is shorting Tesla [TSLA]. The position would allegedly need between $1.5bn and $2.5bn to close it out. There has been a long running feud between the two billionaires. Speaking at The Wall Street Journal’s CEO Summit on 4 May, Gates said he was unsure about Musk’s intentions for Twitter and any acquisition could make the platform worse.

Undervalued technology picks

The losing streak the US market has been on has left many technology stocks undervalued. Barron’s has identified diamonds in the rough by screening the Nasdaq 100 for equities that have fallen more than 20% since the start of the year and are forecast to grow sales by more than 8% in 2023. The seven picks are Micron Technology [MU], Qualcomm [QCOM], Meta [FB], Applied Materials [AMAT], Lam Research [LRCX], Alphabet [GOOGL] and Netflix [NFLX].

Lions Gate to spin off streamer

The golden era of the streaming wars may be losing its glow following Netflix’s woes, but Lions Gate [LGF-A] is looking to spin off Starz by the end of summer. The streamer added 6.3 million subscribers in 2021 taking the total to 35.8 million. CEO Jon Feltheimer said “the main impetus for the separation is that we don’t feel that the Street is giving us the value for the sum of the parts”.

Buying the dip

There is cautious optimism among some analysts that global stocks could be nearing their bottom. According to a Citi note seen by CNBC, it might be time to buy the dip in equities in Europe and emerging markets as these regions have fewer bearish indicators than the US. JP Morgan analysts see opportunities in retailers, selecting Marks & Spencer [MKS.L] and H&M [HM-B.ST] as ones to keep an eye on.

AGL abandons destructive demerger

Australia’s biggest carbon emitter, AGL Energy [AGL.AX], has had to abandon plans to spin off its coal-fired power plant with its CEO and chair resigning after coming under pressure from climate activist and Atlassian [TEAM] co-founder Mike Cannon-Brookes. He acquired a 11% stake in AGL Energy through Grok Ventures, with the private investment firm calling the decision to “abandon its value destructive demerger plan” sensible. 

Virgin Galactic flies higher

The Virgin Galactic has been climbing from its record low of $5.14 recorded earlier in May following a glowing report by Citi on the state of the space industry. The tailwind may be short-lived, however. While tourists are coming round to the idea of riding a rocket ship, ticket prices may put a trip to space out of reach. There is likely to be a bumpy journey ahead for Virgin Galactic. 

Grocery profit warning

The cost of the weekly grocery shop has risen by 7%, according to the latest data from Kantar. Sainsbury’s [SBRY.L] and Tesco [TSCO.L] are both investing heavily to reduce the price of everyday items so shoppers aren’t feeling as squeezed, but margins could come under pressure if customer numbers and online orders don’t keep pace. Marks & Spencer [MKS.L] should be more resistant to inflationary pressures.

 

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