In today’s top stories, NIO shares decline after short seller allegations, Tesla cuts 200 jobs and Pinterest’s CEO steps down. Meanwhile, ARK Invest’s Cathie Wood reverses her stance on inflation and Goldman analysts highlight investment opportunities in semiconductors.
Short seller targets NIO
Chinese EV maker NIO [NIO] has been accused of inflating revenue by Grizzly Research. The short seller argued the company is playing “accounting games” and “financial shenanigans” to “boost net income margins to meet targets”. Hong Kong-listed shares closed down more than 12% on Wednesday. “The report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations,” the company wrote in a statement refuting the claim.
Job cuts at Tesla
Almost 200 workers in Tesla’s [TSLA] Autopilot division have been laid off and a Californian facility has been closed, Bloomberg first reported. The majority of these are said to be low wage and low-skilled roles that involved labelling videos from vehicles to determine how well Tesla’s algorithm identified an object in order to improve the driver assistance system. The cuts come as its Texas and Berlin gigafactories are losing billions of dollars.
Pinterest CEO steps down
Ben Silbermann has stepped down as CEO of Pinterest [PINS], handing the reins to Google’s [GOOGL] Bill Ready, who also spent four years at PayPal [PYPL]. One of the big challenges facing the platform’s growth strategy is getting users to try and buy and not just pin. “Bill is a great leader for this transition. He is a builder who deeply understands commerce and payments,” Silbermann said in a statement.
Cathie Wood admits to getting inflation wrong
With Cathie Wood’s flagship fund, the ARK Innovation [ARKK], continuing to sell off, Wood has held her hands up and admitted that she was wrong about the path inflation would take. She hadn’t expected it to be “as sustained as it has been”, she told CNBC, adding that the US is likely to enter a recession. ARK’s ETFs continue to see inflows, however, and Wood believes this is because “clients have been diversifying away from broad-based benchmarks”.
Goldman sees semiconductor opportunity
Chip stocks are being crunched amid the broader selloff, but Goldman Sachs analysts argue investors are overlooking a semiconductor innovation: silicon carbide (SIC), a chemical compound that’s more efficient than standard silicon. The analysts named Wolfspeed [WOLF] and Infineon Technologies [IFX.DE] as two ways to play SIC that have 70% upside from current levels. Columbia Threadneedle analyst Dave Egan reckons the PHLX Semiconductor Sector Index [SOX] could double over the next couple of years.
Rising food prices eat away at Tesco
Tesco’s [TSCO.L] first quarter numbers showed early signs of how the rising cost of living is changing shopping behaviours, but the grocer is taking steps to alleviate the pressure on squeezed consumers. Hargreaves Lansdown analysts believe the company is in “good stead” and an acceleration of a £1bn cost-saving programme should help to mitigate some of the rising costs. The situation “should play into Tesco’s value-focused hands”.
Prosus sells Tencent to finance share buyback
Prosus [PRX.AMS] is cutting its $134bn stake in Tencent [0700.HK] to buy back stock. CEO Bob Van Dijk told Bloomberg that the repurchasing programme would be open-ended and unlimited. The move should help align the Prosus share price with its net asset value, which as of 28 June was trading at a 46.4% discount. The discount has fallen to an “unacceptable level”, according to the company’s full-year earnings released on Monday.