📵 Facebook's Viral Results

After-hours trading on Meta was crazy… you getting in on this? April 25, 2024 | Peel #696 Silver Banana goes to... [ZenniHome. ]( In this issue of the Peel: - 🏭 U.S. manufacturing held strong in both output and services in April. - 💡 Tesla’s 2024 Q1 report was terrible… yet they spiked over 12%?! - 📱 After-hours trading on Meta was crazy… you getting in on this? Market Snapshot 📸 Banana Bits 🍌 - There are >137k of you getting this email yet but less than 100 in the Discord? At what point does it become a crime against humanity? [JOIN NOW]() - Sick of dumping cash into VR, Meta is now [dumping into AI]( - IBM is buying HashiCorp [for $6.4bn]( while missing on earnings - It’s about time—McKinsey comes under legal fire for [helping cause the Opioid Crises]( - Cost-push inflation sucks, but apparently, demand-pull inflation [might be good for stocks](=) Last Chance to Invest in ZenniHome - $74M in Grant Awards Announced With over 80,000 soft orders and 1,000+ B2B orders firmly in process, ZenniHome is prepared to solve the housing crisis at scale. ZenniHome has taken a completely new approach to their product with a new category called FASST housing (Factory Built, Advanced Tech, Sustainable, Stackable, Transportable). Their two base units are standardized and built like cars. They can be used individually or stacked up to 5 high over podium in multifamily configurations. Recent accomplishments: - Dr. Michael Schmitt has joined as COO (previously Tesla and Bosch) to lead building factory 2.0 capable of 20+ homes per day - $74M in grants awarded from Navajo Nation for factory expansion and minimum 200 home purchases - Pipeline full well into 2026 - Featured in Forbes, Builder Magazine, and Yahoo Finance [Closing Soon: Learn more and Invest in ZenniHome]( Macro Monkey Says 🐒 Slowing But Growing In recent years, the world—and especially the news cycle—has been all but completely taken over by artificial intelligence, robots, and, worst of all, the nerds that built them. But thankfully, some of us are out here still doing cool sh*t and actually making things that matter to us right now… not in some hypothetical, futuristic Brave New World. Now, I’m definitely not one of those people, but the U.S. manufacturing sector sure is. And before Elon’s Optimus robots take this over too, let’s see how they’re doing. The Numbers April still isn’t over yet, but apparently, S&P Global has finished counting up the Purchasing Managers’ Index for the month. Releasing this data way too early must be their way of compensating for the uselessly lagged S&P Case-Shiller Index. [Source]( Anyway, U.S. manufacturing continued flexing in April, even though those biceps may have been looking a little bit smaller. Both output and services activity held strong above the key 50-level, indicating expansion while above and contraction when below that level. But, looking closely at the Alex Jones side (a.k.a. far right) of that graph, we can see both are heading lower. The total Global Flash U.S. Composite Output Index (Jesus, these people are addicted to long-*ss names) declined to 50.9 in April from 52.1 back in March, a 2.3% decline. Breaking it down, services fell only 1.5% to 50.9 as well, which is right in line with the composite. Output, on the other hand, fell 5.7% for the month to 51.1 Services tend to account for 70%-80% of U.S. GDP in any given year, so seeing that flirting closer with the sub-50 line isn’t ideal, but the S&P’s jumping-the-gun on manufacturing data in April kinda goes against another report we just got… [Source]( Taking their time to actually count this stuff, the Census Bureau reported that new orders for durable goods increased solidly in March. Now, that could’ve slowed in April, but my pending depression tells me to just enjoy it for now. New orders for durable goods rose 2.6% in March, giving us the first back-to-back monthly increase since last spring. Transportation equipment dominated the monthly gain, increasing by 7.7%; excluding this, new orders rose only 0.2%. Excluding Ukraine, I mean, *defense spending, new orders still rose decently at 2.3%, so it’s good to see the military-industrial complex is still doing okay for itself. Not sure who was buying transportation equipment like Boeing’s coffins, I mean, *planes (sorry, lotta typos today) and vehicles, but excluding these items gives further reason for concern around manufacturing, especially in the context of Output above. Lastly, inventories remained flat in March compared to February but were 2.2% higher than in March 2023. Rising inventory levels can be confusing, but generally, we want to see inventory falling, as that means people are actually buying sh*t. The Takeaway? [Source]( Despite the broad slowdown—but notably, not decline or contraction—input prices still found a way to rise for the month, contributing to inflationary pressures we’ll get the full rundown on this Friday with the release of the March PCE. Output prices increased slower, but something tells me that still isn’t gonna put a smile on JPow’s face anytime soon. The positive sign for inflation in this report was the demand for employment slowed marginally for the period. Needless to say, this isn’t ideal for the applicants to those jobs, but lower labor demand = slower wage growth = lower inflation (hopefully). In all honesty, these reports carry very little weight for policymakers, especially when the monthly readings come in so damn boring like this. But, it’s important to keep in mind that manufacturing tends to be a leading indicator for economies, so we could be getting a glimpse into our future. Whatever, let’s just ask an AI what’s gonna happen, I guess. What's Ripe 🤩 Tesla (TSLA) 📈12.1% - Like sending that late-night “you up?” text and actually getting a reply, Tesla’s god-awful Q1 report somehow led to its best day in nearly 3-years. - Shares boomed as, despite the misses across the board, investors are buying (literally) the fact that Tesla is no longer “just” a car company. - Yesterday’s call was dominated by AI and affordable cars working together to create what Musk called an “Airbnb + Uber” model for Robotaxis and FSD. - It’s still pretty pie-in-the-sky, but betting against Musk’s promises hasn’t exactly been too profitable… even if they take longer than expected. As a reminder, check our [thesis on Tesla here](=) (have we ever been wrong?) Hasbro (HAS) 📈11.9% - We know that our stocks aren’t toys, but can our toys become our stocks? Well, yes—and apparently, they should because Hasbro killed it in Q1. - The toymaker has been through the ringer since late 2019 as parents often now get their kids to shut up with iPads instead of actual age-appropriate toys. - But, they stemmed the bleeding, delivering $0.61/sh on $757mn vs the $0.27/sh on $737mn expected. Sure sales still fell 24.3%, but we don’t have to talk about that… What's Rotten 🤮 Enphase Energy (ENPH) 📉5.6% - Clearly, the Street heard that we’re close to releasing our Enphase report, and they’re already labeling us “New Jim Cramer.” - Psh, we’ll see. Enphase again had a rough Q1 as the solar industry is still going through it. Sure, both sales and EPS fell YoY and missed expectations, but… - We’re optimistic. High rates have been brutal, but analysts note Enphase’s position as a market leader should lead to a strong recovery… eventually… we hope. Evercore (EVR) 📉4.9% - Even Tom Brady threw a pick once in a while. The gold standard of M&A and a firm I’m sure a lot of you would cut off an arm to work for missed big in Q1. - Evercore reported a 143% jump in underwriting fees and a 7% decline in advisory fees, leading to a 1.5% total YoY increase and a nice miss on estimates. - Analysts were expecting $2.09/sh on $636.4mn in revenue and instead got the same earnings but on only $580.8mn, an 8.7% swing-and-miss. = Thought Banana 🤔 Earnings Spotlight: Meta Platforms Smoking cigs kills you, but at least you look cool while doing it. BP attempted to replace the Gulf of Mexico with oil, but at least oil makes your car go. Meta’s products make you depressed, you don’t look cool using them, and the only place they make you go is to your new therapist’s office. So let’s all hold hands and celebrate by dancing on the grave of the worst thing to come into our world since that stupid virgin invented calculus. Meta’s shares are plummeting after hours following the firm’s Q1 earnings report. The Numbers It’s currently 10:49 pm, and shares have already gotten trampled 15.57% lower. This is basically the exact opposite of what we saw with Tesla yesterday. Meta beat on both EPS and sales, reporting $4.71/sh on $36.5bn vs consensus estimates for $4.32/sh on $36.2bn, but guidance was more depressed than the firm’s users. Still, the 27% jump in revenue does indicate a healing company and economy, as ad spending is one of the most economically sensitive costs for most companies. That makes Q1 the single-best quarter for annual revenue growth since 2021. Meanwhile, Zuck’s quest to cut costs that spread quickly to *checks notes* every other company in America last year seems to have worked out. Meta shaved its headcount by 10% between now and Q1 2023, contributing to the 16% annual decline in SG&A (selling, general, and administrative) costs. Altogether, and unfortunately, this led to a 116.7% rocket launch in net income. But investors couldn’t have cared less. All eyes were on the future, as always, and Meta’s guidance for Q2 came up weaker than Zuck’s rizz in The Social Network. Meta expects revenue of $37.75bn, plus or minus $1.25bn, next quarter, while the Street was looking for a target of $38.3bn. Yes, that is basically all it took to knock off nearly ~1/5th of the firm’s value. But, much of this underperformance is due to the recent overperformance shares have seen. Before last night’s meltdown, Meta was up 39.4% YTD and 137.8% in the last year. Keep in mind, WSO Alpha is up only 7.5% YTD, so clearly the stock has been frothy. The Takeaway? Meta is performing well but not well enough to meet the market’s expectations. This is a continuation of the trends launched by the C-19 pandemic, creating a boom, then bust, and now boom again—but not boom enough kind of cycle. Further, the more important takeaway here is the ramifications for the global economy. Meta performing well suggests that companies felt comfortable enough in Q1 to outlay more cash than expected in marketing, suggesting that the conditions were good. But most importantly, this is a big, fat warning to firms yet to report like Pinterest and, most of all, Snap. We’ll be waiting until next week for Pinterest, but Snap reports later today. You might want to grab some popcorn or this one. 💭 The Big Question 💭: Was this share price reaction justified or an overreaction? How do you think Meta will perform over the next few years, and how will regulation impact them? Lastly, you buyin? Banana Brain Teaser 💡 Previous 🗓 In a certain sequence of 8 numbers, each number after the first is 1 more than the previous number. If the first number is -5, how many of the numbers in the sequence are positive? Answer: 2 numbers are positive Today 🕐 Company Q plans to make a new product next year and sell each unit of this new product at a selling price of $2. The variable costs per unit in each production run are estimated to be 40% of the selling price, and the fixed costs for each production run are estimated to be $5,040. Based on these estimated costs, how many units of the new product will Company Q need to make and sell in order for their revenue to equal their total costs for each production run? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks,” — Mark Zuckerberg How Would You Rate Today's Peel? 😁[All the bananas](=) 😐[Meh](=) 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE](=) // [WSO ALPHA]() // [ACADEMY]( // [COURSES]() // [LEGAL]( [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353