Here’s Why $TSLA Sank Despite Record Profits

[image]() Oct 21, 2022 | Peel #321 Market Snapshot Elon’s been spending a lot of time with lawyers lately, but that didn’t prevent Tesla from notching a record quarterly profit in Q3. Yet it wasn’t enough to prevent the stock from cratering. To earn its lofty valuation, it needs to ramp up vehicle deliveries ASAP. In other news, U.S. residential real estate is continuing its plunge, mortgage rates are a hair below 7%, and bond yields are on the rise. Let’s get into it. [image] Banana Bits - Liz Truss served [a record-low 6 weeks]() as U.K. Prime Minister and couldn’t even outlast [a block of lettuce]( - Leo Messi is starting an investment company in the Bay Area called “[Play Time](” that will invest in sports, media, and tech - Joey B is [dipping into the strategic petroleum reserve]() again in an attempt to ease gas prices - [College enrollment is dropping]( as teenagers opt to do other things rather than take on mountains of debt in return for questionable earning potential Macro Monkey Says Behold the Beige — The Fed released its analysis of the economy for October in the excitingly-named [Beige Book report]( Wednesday. It’s essentially a compilation of what each of the Fed governors is hearing from businesses in their districts. Here are the key takeaways: - Businesses have dour expectations for the economy going into next year - Prices remain stubbornly high, but the increases are starting to plateau, driven by lower commodity costs - Pricing power looks like it will continue to be a key determinant of winners and losers until inflation is under control - Retailers are increasingly seeing customers move to lower-priced options as they balk at eye-watering prices Meme of the Day [image](=) [Source]() What's Ripe AT&T ($T) ↑ 7.72% ↑ - The Big T is mostly owned by investors seeking dividend income, who are attracted by its 6.54% annual dividend yield. - But they got a growth stock-style bounce on Thursday after the company reported huge wireless revenue growth in the quarter Shopify ($SHOP) ↑ 4.87% ↑ - Despite constant chatter of layoffs and a recession around the corner, the American consumer seems unfazed, as evidenced by strong recent retail earnings reports - A weak Prime Day could either be a proxy of tepid demand overall or a sign that Shopify is gaining on the 800-pound gorilla. Investors were betting on the latter Thursday. What's Rotten Allstate ($ALL) ↓ 12.90% ↓ - Shares were plunging after the company announced a near billion dollar loss in the quarter. - Hurricane Ian caused millions in claims, and inflation has ratcheted up costs for repairs that insurers like $ALL are on the hook for. Tesla ($TSLA) ↓ 6.65% ↓ - Elon’s full-time job seems to be sparring with Twitter these days, but he’s still got a side hustle as top boss at Tesla. - Despite beating EPS, it missed its top line target. When you’re paying [71 times earnings]( for the privilege of holding the stock, blowout quarters need to be the norm. Data Peel [image](=) [Source]( Thought Banana Private Jets Go Mainstream — First-class airline travel is great, but the legroom and free champagne doesn’t always cancel out the hellish experience within many U.S. airports. Private jets have historically been reserved only for the 1% of the 1%, but now the merely rich are starting to enter the market. - 2021 had the [highest number of private jet flights](=) on record - Financial assets have largely struggled this year, but those at the top have still seen their wealth balloon over the last several years - The silver lining is that there are regular people that benefit from this hot corner of the economy—engineers who design and build these things, private flight attendants, etc. - But it’s not a good look when most of the country is bracing for recession while those at the tippy top buy more and more toys The big question: If private jet demand stays elevated amid a broad-based recession, will U.S. citizens demand a billionaire’s worst nightmare—a wealth tax? Banana Brain Teaser Yesterday — Three or four, I can stab through or rule the seas. You know my cousins. What am I? Fork (Poseidon rules the seas with his fork/trident in hand). Today — It’s 100 bananas off the [Investment Banking Interview Bootcamp](). LFG! I have married many women but have never been married. Who am I? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line “Banana Brain Teaser” or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](. [ADVERTISE]() // [WSO ALPHA]() // [COURSES](=) // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](=). Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States