In today’s top stories, investors were lukewarm on Tesla’s cost-cutting master plan, as electric vehicle (EV) demand falls. Elsewhere, South Africa’s Aspen has put unused vaccine manufacturing lines to good use, tripling its sales forecast as a consequence. Last year punters did rather well, and as result top betting app Flutter took a £40m hit. On which note, Greenlight Capital’s strategy of shorting “bubble basket” stocks netted 30% returns last year, and the firm will stick with it going forward. Lastly, Chinese officials are stalling the transfer of British chipmaker Arm’s Chinese joint venture, Arm China, to SoftBank.
Does Tesla have a master plan to cut costs?
As demand for electric vehicles stalls, Tesla’s [TSLA] “Master Plan 3” underwhelmed investors at its Investor Day on Wednesday, and the company’s shares fell 5% in after-hours trading. Elon Musk promised to halve production costs, but offered no release date for Tesla’s highly-anticipated affordable EV. Models priced below $55,000 from Tesla’s new factory in Mexico will qualify for a $7,500 tax credit under the IRA.
Tripling forecast gives Aspen a shot in the arm
Aspen Pharmacare [APN.JO] has almost tripled its sales forecast from unused sterile manufacturing lines, leading to a second consecutive day of gains for Africa’s largest pharmaceutical company. Having previously expanded capacity for the production of Covid vaccines, demand for which has evaporated, Aspen has commenced technical transfer projects with four multinational companies for treatments for cancer diabetes and other conditions.
Wrong results send Flutter shares down
Flutter [FLTR.L] missed analyst expectations for 2022 earnings as “customer-friendly results” in the World Cup and English Premier League catalysed a £40m hit to the business. While adjusted EBITDA rose 4% year-over-year to £1.05bn, this figure fell short of the £1.07bn expected by analysts surveyed by Bloomberg. Flutter’s share price fell 6.6% in response to the news, its biggest drop in the past year.
Einhorn gains 30% on bubble stock shorts
Greenlight Capital [GLRE] manager David Einhorn is continuing his firm’s strategy of shorting “bubble basket” stocks, which netted 30% returns last year to contribute towards gross returns of 42.3% for the hedge fund. In Einhorn’s annual letter, released by the firm last month, he described bubble stocks as those which “could fall at least 80% and still not appear cheap to us”.
China delays chipmaker transfer
Chinese officials are stalling on the paperwork for the transfer of British chipmaker Arm’s Chinese joint venture, Arm China, to owner SoftBank [9984.T]. The delay is setting back Arm’s highly anticipated IPO. The state-owned National Integrated Circuit Industry Investment Fund will invest 12.9bn yuan into memory chipmaker Yangtze Memory Technologies to counter US sanctions on China’s microchip industry.