Tesla Hits A Speed Bump

TESLA: Misses Earnings

Tesla stock fell 8% after CEO Elon Musk's explanation for slower sales growth didn't convince investors. The company, which narrowly missed earnings estimates, has warned of a lower growth rate this year due to price cuts in 2023 impacting profits.

Tesla is reaching the limits of cost-cutting on its existing vehicles and has not set specific targets for the upcoming year. Vehicle deliveries grew 38% last year, with a 20% increase expected this year.

In the fourth quarter, Tesla reported earnings of 71 cents per share, below the 73-cent expectation, and revenue of $25.2 billion, less than the forecasted $25.9 billion.

Musk indicated these issues might be temporary, with plans to produce a cheaper, next-generation vehicle in Austin and Mexico. This move aims to target more budget-conscious consumers. However, until these new models are available, Tesla will focus on its current lineup, including gradually rolling out Cybertruck.

Tesla's profitability has been affected by these strategic changes, with automotive gross margins at 17.2% for the quarter, slightly above a multi-year low, mainly due to price cuts and increased expenses.

🎯 GRIT TAKE: When we break down Tesla earnings, we should…upgrade to VIP to read the full GRIT Take. 

TESLA: Misses Earnings

Tesla stock fell 8% after CEO Elon Musk's explanation for slower sales growth didn't convince investors. The company, which narrowly missed earnings estimates, has warned of a lower growth rate this year due to price cuts in 2023 impacting profits.

Tesla is reaching the limits of cost-cutting on its existing vehicles and has not set specific targets for the upcoming year. Vehicle deliveries grew 38% last year, with a 20% increase expected this year.

In the fourth quarter, Tesla reported earnings of 71 cents per share, below the 73-cent expectation, and revenue of $25.2 billion, less than the forecasted $25.9 billion.

Musk indicated these issues might be temporary, with plans to produce a cheaper, next-generation vehicle in Austin and Mexico. This move aims to target more budget-conscious consumers. However, until these new models are available, Tesla will focus on its current lineup, including gradually rolling out Cybertruck.

Tesla's profitability has been affected by these strategic changes, with automotive gross margins at 17.2% for the quarter, slightly above a multi-year low, mainly due to price cuts and increased expenses.

🎯 GRIT TAKE: When we break down Tesla earnings, we should not sugarcoat it. They did not have very good earnings compared to their past success. That said, an investor cannot expect a company always to have great earnings quarter after quarter. One of the most interesting things we are following is a quote from Elon Musk. He urged investors not to look at Tesla as a car company but as an artificial intelligence, battery, and robotics company.

EARNINGS: Comcast

Comcast surpassed revenue and earnings estimates in the fourth quarter with a 7% dividend increase.

Net income rose 7.8% to $3.26 billion while revenue grew 2.3%, and adjusted EBITDA remained stable at about $8 billion. The company announced a dividend hike to $1.24 per share and a new $15 billion share repurchase program.

Free cash flow reached $1.7 billion for the quarter and $13 billion for the year. Despite losing 34,000 broadband subscribers, less than the 62,000 anticipated, broadband revenue increased 3.7%.

Wireless subscriber growth was slightly below expectations, while video subscriber losses were less severe than predicted. Theme park adjusted EBITDA grew 11.6% to $872 million, setting a new record.

Peacock added 3 million subscribers, with revenues exceeding $1 billion for the first time, and reduced its quarterly loss. Overall media revenue increased 3.1% to nearly $7 billion, despite a 50% drop in adjusted EBITDA due to higher sports and programming costs. Domestic advertising revenue decreased 6.9% year-over-year.

Ellison: Looks To Acquire Paramount

David Ellison has proposed to acquire National Amusements Inc., the Redstone family's holding firm, to gain control of Paramount Global, the parent company of MTV and Nickelodeon. He is also discussing merging his Skydance Media with Paramount post-acquisition. Both parties are consulting advisers and sharing financial information confidentially.

National Amusements, which owns 77% of Paramount’s voting shares, is negotiating with Ellison. Ellison plans to finance the deal through Skydance's investors, including his father, Larry Ellison, and firms like RedBird Capital Partners and KKR & Co.

Ellison, 41, aims to buy one of Hollywood's top studios. He has worked with Paramount Pictures on projects like the Star Trek and Mission: Impossible series and Top Gun: Maverick.

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This Guy Hacked Shark Tank

This guy cheated on Shark Tank and sold his company for over $50 million because of it. 

Gary Gee was obsessed with learning how to build apps but never built his own. However, he accidentally found an app that scans barcodes and explains the products. Fortunately, he never found one he liked and decided to build his own. The app was Scan App, which could identify any product with a barcode. It was so popular that it got downloaded once per second for months and became the number one app in the app store. 

Shark Tank invited Gary Gee, who sought out a $20 million valuation even though he already had investments from Naval and Chamath. 

This is where things get interesting: 

Shark Tank has a very serious rule that a company cannot put a scannable QR code anywhere on the television. So Gary Gee put a dummy QR code on the set, but when he left, he hacked it, so the QR code pointed directly at his app in the app store. 

This again sent his app soaring in the app store, and he sold it to Snapchat for $54 million. 

Chart of the Day

📊 TESLA Q4 INCOME STATEMENT

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