Good morning, readers. I'm senior reporter Phil Rosen. If you didn't see Friday, Elon Musk has named the former NBC exec Linda Yaccarino as Twitter's new CEO.
And with Musk announcing he'll take on the role of chief technology officer for the social media platform, some strategists say it'll allow him to put more attention toward Tesla — something shareholders have been begging him for since he first made his bid for Twitter.
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AP Photo/Mark Lennihan
1. Tesla shareholders cheered immediately after Musk on Thursday said he'd step down as Twitter CEO, with shares climbing in after-hours trading and in pre-market hours on Friday.
Indeed, Wedbush managing director Dan Ives said it's great news for Musk's Tesla as well as SpaceX, since his earlier-than-expected departure will grant him the necessary time with his "golden child" companies instead.
"With the tweet [Thursday] afternoon, Musk's reign as CEO of Twitter has finally come to an end and thus will be a positive for Tesla's stock, starting to finally remove this lingering albatross from the story," Ives said.
Wedbush maintained its outperform rating for Tesla, and shared a 12-month price target of $215, or about 27% higher than the current share price.
But Gene Munster cautioned that this development may only be somewhat good for Tesla, since Musk stepping back from Twitter also opens him up for other non-Tesla projects, like his new startup X.AI.
In other words, it's good news for Musk, but that doesn't explicitly mean good news for Tesla, the Deepwater managing partner said Friday, especially given the billionaire's potential interest in competing with OpenAI's ChatGPT.
In any case, there's reasons beyond Twitter happenings that Tesla bulls can cheer.
The long wait times for vehicles, according to Piper Sandler, is a bullish sign because it means demand is robust.
Tesla's website shows American buyers must now wait between three and 12 weeks for the Model Y car, up from zero to three weeks.
It may feel annoying for customers, but the details should be taken in stride for shareholders.
"In recent weeks, investors have been asking us why wait times haven't responded more noticeably to Tesla's price cutting campaign," analyst Alexander Potter wrote in a note. "The answer is complex, because wait times don't solely reflect consumers' appetite for buying Teslas vs. other cars."
In effect, the lengthy wait times should be "interpreted favorably," in Potter's view.
Piper Sandler's price target for Tesla is $280 a share, or more than 65% higher from current levels.
What's your price target for Tesla by the end of 2023? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.
In other news:
Brendan McDermid/Reuters
2. US stock futures rise early Monday. It comes as investors mull Friday's preliminary reading from the University of Michigan that showed consumer sentiment falling to a six-month low. Meanwhile, Wall Street will be watching for May data for the Empire State Index, due later this morning. Check out the latest market moves.
3. Earnings on deck: Constellation Software, SMC, and more, all reporting.
4. Warren Buffett's businesses are battling historic inflation and tighter lending. Five Berkshire Hathaway CEOs — ranging from See's Candy, Dairy Queen, Brooks Running, and more — told Insider why they're still thriving despite a brutal economic backdrop.
5. A recession and a credit crunch could spark $1 trillion of corporate debt defaults, according to Bank of America. They added that even if a full-blown downturn doesn't hit in the coming years, a credit crunch would only be delayed, not averted. Read more.
6. Investors are de-risking their exposure to the market. Margin debt used to buy stocks has plunged by $329 billion since the October 2021 peak — and that exceeds the decline seen from the 2008 Great Financial Crisis and the 2001 dot-com bubble burst.
7. The family behind First Citizens Bank has seen its wealth double to $2.2 billion after buying SVB's assets out of bankruptcy. CEO Frank Holding and his relatives have seen their combined wealth skyrocket since March. Since 2008, the family has purchased more than 20 failed banks.
8. Take a look at the 82-page real estate pitch deck a millennial spent over 100 hours writing. The presentation helped him raise $7 million to invest in properties after he had emailed it to about 100 people. Get the full details.
9. The top large-cap fund manager from the past 12 months shared his strategy. He said he made one simple change that completely turned around his portfolio — and listed the 13 stocks he loves now.
Ned Davis Research
10. The inverted yield curve is telling us that a recession is due around July this year. Ned Davis Research broke down the indicators that are signaling trouble ahead for the US economy. These seven charts show that downside looms just around the corner.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.