Mounting pressure in China is driving Tesla’s stock price down 🤨
Friday, 23rd April 2021 by Gotrade
Hey Gotraders,
Tesla (TSLA) is facing increased pressure and scrutiny in China. The media and regulators are criticizing Tesla following an alleged customer’s protest at a major auto show in Shanghai earlier this week.
What happened at the auto show? Ummm… believe it or not, a woman climbed onto a Tesla car, wearing a T-shirt that read “brakes don’t work” in Chinese. You can watch the video here. She claimed that the brakes in her Tesla car didn’t work, resulting in an accident that left her parents needing hospital treatment.
How did Tesla respond to this incident? Tesla alleged that the woman got into the accident due to “speeding violations” and that in their two months of negotiations, she would not allow a third-party inspection but insisted on a refund for the car. Tesla posted on their official Weibo channel saying that it would not compromise with “unreasonable demands.”
How did state media report the news? State media criticized Tesla for being “arrogant.” State-backed Chinese publication Global Times was quoted as saying “The arrogant and overbearing stance the company exhibited in front of the public is repugnant and unacceptable, which could inflict serious damage on its reputation and customer base in the Chinese market.”
Tesla’s response to criticism from state media: Tesla apologized for not solving the car owner’s problems in a timely manner. Earlier this week, they posted the following statement on Weibo: “We apologize for failing to resolve the problem of the car owner in time. We will try our best to learn the lessons of this experience.”
Why is this important? China is a relatively closed market. But they agreed to let Tesla in. They can just as easily boycott them and force them to exit the market. This is exactly what is happening with other brands such as H&M and Nike.
“Letting the market leader in was very much in China’s interest, but letting the market leader dominate the market is not in China’s interest” - Bill Russo, Founder and CEO of Automobility Limited.
Tesla needs to rectify the situation and appease the locals and state media if they want to carry on doing business in China, which is one of Tesla's largest growth markets.
P.S. Tesla stock is down 3.28% yesterday, trading at $719.69. Tesla is set to release earnings next week on April 26th.
📉 Coinbase stock suffers as news of delisting emerges 🔻
In case you missed it - the largest crypto exchange, Coinbase (COIN) got listed on NASDAQ just last week. Unfortunately for them, news emerged yesterday that they will be delisted from Deutsche Boerse’s Xetra trading system, as well as the Frankfurt stock exchange by end of today. According to Deutsche Boerse, the delisting is due to “missing reference data for those shares.” Hmm… 🤔
Coinbase stock fell 5.92% as a result, currently trading at $293.45.
📈 Nikola shares rose over 14% following the release of their hydrogen fuel station and battery truck production plans 🔋
Nikola (NKLA) plans to collaborate with TravelCenters of America (the largest publicly traded full-service truck stop and travel center company in the United States) to install hydrogen fueling stations for heavy-duty trucks at two sites in California. The initial stations are “a first step for the parties to explore the mutual development of a nationwide network,” according to Nikola.
Shares of Nikola are up 14.38% as a result, currently trading at $11.77. 🚀
Top movers & shakers 🎢
What else is making headline news
AT&T (T) CEO says “glory days are still in front” of HBO despite fierce streaming competition.
Dish Network (DISH) stock jumps after company announces Amazon (AMZN) cloud deal for 5G buildout.
Chipotle (CMG) earnings smash estimates as online sales overtake in-person orders.
Upcoming earnings for this week
Friday: American Express (AXP)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
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