In today’s headlines, Tesla CEO Elon Musk (pictured) dumped 7.92 million shares and Unity announced a $1bn joint venture to expand its reach in China. Other top stories include long-short hedge funds’ success in July, analysts’ consumer stock picks and trouble for semiconductor stocks.
Musk dumps $6.9bn of Tesla stock
With his court date with Twitter [TWTR] looming, Elon Musk has offloaded 7.92 million Tesla [TSLA] shares worth roughly $6.9bn. Replying to a tweet, Musk said the sale was necessary. “In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” he wrote.
Unity strikes $1bn joint China venture
Games software developer Unity [U] is reported to have set up a joint venture to extend its reach in China. The deal will see a number of parties including Alibaba [BABA] and China Mobile [0941.HK] invest $1bn. Junbo Zhang, CEO of Unity China, has said that it plans to hire 1,000 engineers in the coming years as well as expand its Beijing, Shanghai and Guangzhou offices.
Long-short hedge funds rise in July
July marked the S&P 500’s best month since November 2020 and strong equity markets have also helped long-short-focused hedge funds like the HFRI 500 Equity Hedge Index to return gains last month after a poor first half of the year. Ken Heinz, president of Hedge Fund Research, told Institutional Investor that the rally was led by technology strategies, followed by fundamental value, fundamental growth, and energy and basic materials.
Consumer stocks that won’t fizzle out
Consumer spending is surging amid rising food costs and higher prices at the pump. Morgan Stanley is beginning to see consumers spend less on categories such as tobacco, fast food and certain non-essential grocery lines, including soda, according to CNBC. But Barclays analysts believe the likes of Coca-Cola [KO], PepsiCo [PEP] and McDonald’s [MCD] can thrive in a lower spending environment. They also like Expedia [EXP] and Nutrien [NTR].
Chips are down as demand slows
The chips were down for all 30 constituents of the Philadelphia Semiconductor Index [PHLX] on Tuesday on a combination of slowing demand and excessive inventory. Citigroup analyst Christopher Danely believes the sector is heading for its worst downturn in at least a decade — maybe since 2001. “We expect every company in our coverage universe and every end market to experience a correction,” wrote Danely in a note seen by Bloomberg.
Centrica set to weather energy crisis
British Gas owner Centrica [CNA.L] has been basking in bumper profits, but this has drawn ire amid rapidly rising household energy bills. The stock has been given the cold shoulder in the past week, falling 5.3%, but the company has plans in place to weather any difficulties this autumn and winter. It was announced Tuesday that it had secured future liquefied natural gas supplies from the US from 2026 for £7bn.
Entain hopes odds are in its favour
Lower consumer spending means punters have less cash to place bets and have a flutter on casino games. Nonetheless, Entain [ENT.L] is confident that it will report an interim revenue rise tomorrow. The group, which owns Ladbrokes, Coral and bwin, has a growing US arm, BetMGM, and its performance will likely be a big indicator as to whether the odds are in Entain’s favour.
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