Tesla (NASDAQ:TSLA) fans and investors are keenly awaiting the EV maker’s annual shareholder meeting this afternoon, which will kick off at 5:30 p.m. ET. Shares have been on a rip before the event, which was recently rebranded as “Cyber Roundup,” and will take place at the company’s new Gigafactory in Austin, Texas. In fact, the stock (known for its volatility) has rebounded nearly 50% from $620 in late May – several weeks after the meeting was announced – to $922/share as of Wednesday’s close. TSLA +1.5% premarket.
On the menu: At the top of the list is authorization for the company to have more shares outstanding. It’s seeking approval for its second stock split (3-for-1) in two years, following a 5-for-1 transaction in August 2020 (shares are up 130% since that date). “We believe the stock split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity,” according to Tesla. “The stock split will also make our common stock more accessible to our retail shareholders.”
There are a number of other stockholder proposals up for vote, including shareholder proxy access, disclosure and diversity efforts, ESG, and a collective-bargaining policy. This year’s Cyber Roundup will also conclude the end of a short directorship of Larry Ellison, co-founder of Oracle (ORCL) and friend of Elon Musk. After his departure, Tesla’s board will drop to seven members, and two controversial directors – Ira Ehrenpreis and Kathleen Wilson-Thompson – will be up for re-election (concerns center around the amount of borrowing taking place against Tesla stock).
Putting on the cowboy hat: Vying least for attention is Technoking Elon Musk, who will take to the stage to whip up investor enthusiasm. He’s hoped to provide more details on production holdups and supply chain costs after repeatedly saying that Tesla can sell all the vehicles that come off its assembly line. The Q&A session might also reveal how Tesla will meet its battery needs, more defined timelines for the Semi and Cybertruck, and if and how the company is planning for a recession. (3 comments)
The current rate hiking cycle is showing no signs of letting up as the Bank of England gets ready for its sixth increase since December. This time around, the U.K. central bank is even expected to raise borrowing costs by 50 basis points, or double its previous round of quarter point hikes. It would also be its largest increase in 27 years, lifting key interest rates from 1.25% to 1.75% – to their highest level since the start of the global financial crisis.
Commentary: “We know they’re worried about sterling and in that sense they don’t want to be left as the odd one out by not joining the 50-basis-point club,” said ING economist James Smith.
Meanwhile, the BoE is due to give more details about how it plans to start selling down its massive £844B sheet of government bond holdings. Last month, Governor Andrew Bailey said the central bank could offload £50B-£100B over the course of a year following more than a decade of economic stimulus. The BoE also stopped short of forecasting a technical recession in its last Monetary Policy Report in May, but shifts in language or expectations could change in today’s edition.
Go deeper: Inflation in the U.K. is now running at a 40-year high of 9.4%, triggering a cost-of-living crisis amid surging food and energy prices. The central bank’s inflation-fighting record has also been questioned by Liz Truss, the front-runner to be the next U.K. prime minister. She has pledged to set “a clear direction of travel” for monetary policy, as well as a review of the BoE’s mandate that can lead to greater oversight by members of parliament.
Just a week after Walmart (NYSE:WMT) slashed its quarterly and full-year guidance, cuts are coming to the company payroll. The firm is laying off hundreds of corporate employees at divisions related to merchandising, global technology and real estate. Walmart painted the move as an effort to reorganize itself as it marks down apparel and other items that have piled up in its stores.
Bigger picture: Other retailers have also been caught off guard as consumers shifted spending this spring from higher-margin goods that had been in demand for much of the pandemic. Shoppers are now more keen on basics like food and toiletries, as discretionary spending takes a hit from the current inflationary environment. Target (TGT) and Best Buy (BBY) also recently cut their outlooks as they look to right-size their inventory for the remainder of the year, which could lead to further discounts and lower profits.
“The signal this sends is not a good one,” noted Neil Saunders, retail analyst at GlobalData. “This could further sour the economy and consumer confidence with it.”
Is the job market showing cracks? Like many economic indicators these days, it’s a mixed bag of segmented data. Companies are reducing the pace of new hires, and even freezing or cutting roles, but hiring is still taking place in areas that are growing (the latest jobs report is out tomorrow). In the case of Walmart, the retailer even noted that while it is downsizing corporate, the restructuring will create new roles in e-commerce, health and wellness, supply chain services and advertising sales. (6 comments)
The Federal Aviation Administration has begun reviewing airplane seat sizes to assess if a minimum standard should be established. Note that this is not from a comfort perspective, but rather if minimum seat sizes are necessary for passenger safety, like in the case of an emergency evacuation. The public will have 90 days to submit recommendations on existing seat widths and lengths, as well as “pitch,” which is industry jargon for the space between rows.
Backdrop: As airlines have continued to shrink their seat sizes, passenger advocacy groups like FlyersRights.org put forward petitions for minimum standards that were eventually backed by Congress. The FAA was ordered to move forward with size regulations as part of the FAA Reauthorization Act of 2018, but things have gotten delayed since then (the pandemic hasn’t helped the matter), and the notice has just been published for comment in the Federal Register.
While current regulations don’t mandate minimums for seat dimensions, they do require that planes must be able to evacuate within 90 seconds. Many argue that current seats aren’t inclusive to all body types, and there are additional concerns about tightly-packed aircraft, especially in relation to seat sizes that can vary widely among carriers. The FAA is also asking for feedback regarding how seat sizes can impact children, people over 60, and individuals with disabilities.
Commentary: “Seats have continued to shrink by some airlines, and people are continuing to get larger,” wrote Paul Hudson, president of FlyersRights.org. Our estimate is that only 20% of the population can reasonably fit in these seats now. It’s beyond a matter of comfort, or even emergency evacuation; there are serious health and safety issues when you’re put in cramped conditions for hours on end.”
Be the first to comment