Carvana Lost $500 Million Last Quarter
Carvana – the used vehicle retailer with giant automotive vending machines – has reported that it suffered a $508 million net loss for the third quarter of 2022. Combined with the $945 million it bled through the first half of the year, the business is upside down for nearly $1.5 billion and we’ve still got three months left.
Stonks: Ford Flails on Forecast
Holders of Ford stock were disappointed this week when Blue Oval shares sank on news that supply chain issues and inflation will likely eat into Q3 results. The stock nosedived 12 percent on Tuesday, one of its sharpest falls in a decade.
Report: Ferrari Plotting Italian EV Assembly Line
Ferrari is rumored to be preparing a third assembly line in Maranello, Italy, dedicated for electric vehicles. The automaker has already purchased land near the facility and is presumed to make an official announcement on June 16th when it’s scheduled to present its four-year business plan.
As usual, this comes from a major media outlet that cited unnamed sources from within the industry. Though, considering the luxury sports car manufacturer’s confirmation that it would begin producing hybrid and all-electric automobiles, it’s more than plausible. Ferrari’s first battery electric vehicles are scheduled to arrive in 2025 and it still needs somewhere to build them.
GM Dumps Lordstown Motors
Lordstown Motors has gone from the savior of Ohio to just another blowhard electric vehicle startup. Last year, it became the focus of investment research firm Hindenburg Research and an incredibly damning report that accused the company of fraudulent behavior. The paper cited thousands of non-binding, no-deposit orders and was proven right a few months later when the startup announced it didn’t actually have enough money to commence commercial production. By June, Lordstown was under investigation and losing top-ranking executive with nothing to show for itself other than a factory it purchased from General Motors at a discount where it installed a pointless solar panel array. The company said it would be selling the plant to Foxconn Technology Group (Hon Hai Technology Group) in October, along with $50 million in stock, with the plan being to make the Taiwanese firm a contract assembler for the Lordstown Endurance pickup.
It’s going to need that money too because GM is severing ties with the startup and has confirmed it offloaded its remaining stock over the holidays. While the Detroit-based automaker only held about $7.5 million worth of shares, it still represented about 5 percent of Lordstown and continued support of a business that looked to be foundering.
Report: Elon Musk and Brother Face Insider Trading Probe
The Securities and Exchange Commission (SEC) is reportedly investigating whether stock sales by Tesla CEO Elon Musk and his brother, Kimbal Musk, violated insider-trading rules.
Launched in 2021, the probe is looking into shares sold by Kimbal valued at $108 million one day before Elon polled Twitter to see whether or not he should offload 10 percent of his stake in the company, suggesting he would run with the results. Though the tweet itself was a snide way of discussing proposals from Democrat legislators that would have imposed new taxes on unrealized capital gains, effectively money that doesn’t yet (and may never) exist.
Volkswagen AG Pressing Potential Porsche IPO
Volkswagen Group is apparently in talks with Porsche Automobil Holding SE about a potential initial public offering (IPO) for the Porsche luxury/sports brand. According to a statement from VW, the duo has already negotiated the agreed-upon frameworks and is in final discussions as to when they want to move forward.
Weeks of rumor preceded corporate confirmation, making it seem like the proposed deal was already a shoo-in. But any final decisions will still need to be approved by the management and supervisory boards — something Volkswagen Group said has yet to happen.
Securities and Exchange Commission Checking in on Lucid Motors
Lucid Group Inc. has been subpoenaed by the U.S. Securities and Exchange Commission (SEC) which is on the prowl for any documentation relating to its merging with a special purpose acquisition company (SPAC). Known colloquially as “blank-check firms,” these organizations literally exist to be combined with existing companies as a way to pump the stock and spur investments.
But they’ve gotten a lot of negative attention following a glut of EV startups garnering impressively high valuations based on little more than a business proposal. Those seeking an example need look no further than Nikola Corp, which was outed as having grossly overpromised on its technological capabilities and production acumen after raking it in on the stock market. As a result, financial regulators have become increasingly skeptical of SPACs and want to make sure everything going on with Lucid is above board.
Elon Musk Continues Selling Tesla Shares
Tesla CEO Elon Musk has sold another 934,091 shares of the company, worth a hefty $1.01 billion, as a way to meet tax obligations related to the exercise of options to buy 2.1 million shares. But it’s just a drop in the bucket, as Mr. Musk’s offloading of Tesla stock has surpassed $10 billion overall. That’s roughly 10.1 million shares since the CEO asked Twitter users at the start of November whether or not he should dump 10 percent of his existing stake in the company following its big move to Texas.
Elon Musk Says Tesla-Hertz Deal Has No Contract
Tesla shares took a dip on Tuesday after Tesla CEO Elon Musk tweeted that its deal to provide Hertz with 100,000 electric vehicles had not been ratified with the signing of a contract. While this normally means the deal had not been finalized, the language used by Musk almost makes it sound like whatever Hertz had been claiming previously didn’t even matter.
“You’re welcome! If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” the CEO said in reference to Tesla’s share price pitching upwards by over 8 percent. “Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.”
Hertz Buying 100,000 Tesla Vehicles for Rental Fleet, Brady Endorsement
After managing to avoid what appeared to be certain death, Hertz has decided to purchase 100,000 Tesla vehicles before the end of 2022. Considering the firm was filling out Chapter 11 bankruptcy forms this time last year, the estimated $4.2 billion expenditure designed to ensure that 20 percent of its global fleet is electric does feel slightly frivolous. But Hertz says it’s getting out ahead of the curve and is interested in becoming a “mobility company,” rather than a business that just rents people automobiles.
Nissan Dumping Stake in Daimler
On Tuesday, Nissan Motor Co. announced that it would be selling its shares of Daimler AG. The Japanese firm owns about 1.5 percent of Germany’s oldest automaker and the move is something many were predicting after Renault did the same in March.
Nissan’s offloading will mimic its partners and likewise use an accelerated bookbuild offer that basically means dumping shares as quickly as possible with help from an underwriter. Investors were to expect shares to be priced around 69.85 euros apiece, netting the automaker at least $1.2 billion if everything goes smoothly.
Hindenburg Research Report Lambasts Lordstown Motors, Fabricated Orders
Hindenburg Research, the firm that outed Nikola for overselling its technology in last year’s scathing report, has selected a new target. The company in its crosshairs this time around is Lordstown Motors. While the investment research firm stopped short of saying the Ohio-based manufacturer committed fraud, it came extremely close. On Friday, Hindenburg alleged that Lordstown is stringing investors along, will be unable to adhere to its existing production targets, and fabricated sales to make the business appear more appetizing.
“Lordstown is an electric vehicle [special purpose acquisition company] with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,” reads the report. “The company has consistently pointed to its book of 100,000 pre-orders as proof of deep demand for its proposed EV truck. Our conversations with former employees, business partners and an extensive document review show that the company’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.”
Rivian Targets IPO Before Year's End
Rivian Automotive is seeking to go public in the fall and targeting a valuation of at least $50 billion, according to the latest reports. The all-electric startup company, supported by Amazon and the Ford Motor Company, has already amassed around $8 million from investors and was valued at $27.6 billion less than a month ago.
While we couldn’t possibly say what it’s actually worth, burgeoning EV manufacturers have performed incredibly well on the stock market lately. Rivian would almost assuredly see its valuation balloon to the targeted sum through an initial public offering. It already has a product line, 3,600 employees spread between the Midwest and California, some serious marketing under its belt, and a relatively strong relationship with a few of the world’s largest companies. We’ve seen more done with far less on Wall Street.
Volkswagen Throws Down in Bid to Buy Navistar, Create Heavy Truck Giant
When they’re not preparing to sell an ultra luxury super car brand or creating a new line of electric vehicles, they’re planning a big time merger for a larger piece of the heavy-duty truck market.
It’s only gonna cost them a few billion dollars.
Nikola Delays World Conference, GM Stalls Partnership
Nikola Corp. has decided to reschedule the Nikola World conference that would have offered the public a look at its all-electric Badger pickup and an opportunity to see what else the company was cooking up. Under normal circumstances, we would all just fault COVID-19 and move on with our frustrating little lives. But the firm was recently accused of having misled investors on the true progress of its technology.
Those allegations were rebuffed by chairman and founder Trevor Milton… before he abruptly left the company and Nikola’s ludicrously high stock valuation pivoted in the wrong direction.
Interestingly, most of the blame seems to be staying with Milton. Nikola shares pitched up on Wednesday, despite the only major change being one more vacant office on the top floor. Meanwhile, CEO Mark Russell has been trying to get everyone stoked about Nikola World and all the amazing stuff that’s supposed to be there in December 2020. That included a view of the Badger pickup, which GM was supposed to build and the company has been taking preorders for since June.