Union will undertake Tesla on stock prices
As Elon Musk's normative influence in Washington grew, consider his unprecedented cameo at President Trump's first cabinet meeting on Wednesday – he attracted intense scrutiny and opposition.
The latest pushback comes from the American Federation of Teachers, one of the largest unions in the United States, with an unexpected line of attack. Put pressure on Tesla's biggest investors, Dealbook reports first.
AFT leader Randi Weingarten has written letters to the CEOs of six asset managers. Larry Fink of BlackRock, Abigail Johnson of Fidelity, Ronald O'Hanley of State Street, Tasunda Duckett of Tiaaa, and T. Robert Sharps of Low Price and Salim Ramji of Vanguard. (The mask and the Tesla Committee were copied.)
She is calling on them to review Tesla's current ratings. “This is about protecting workers' retirements,” she said in a statement. “As European sales fell off the cliff this week, Tesla stocks continue to sink faster than Quixand's Cybertruck, so we knew we needed to act.”
Some warnings: Weingarten is one of the most outspoken workers leaders and regularly defends democratic causes. Unions are in wider conflict with masks, and the companies are avoiding organized labor. (The emotions are mutual.)
And the Union Chief stayed quietly when Tesla's stock performance was surged.
Weingarten claims that Tesla is overrated, It potentially measures the investment portfolio of 1.8 million members. The union's chief writes that it is acting on behalf of an estimated $4 trillion in retirement assets through both pension funds and other collective vehicles and individual accounts of its members.
Weingarten said Tesla stocks fell to $290, a 28% drop in the past month. It pointed out that it was a number of signs that the company is facing more headwinds.
-
The quarterly decline in revenue and profit margins, and the union said it implied that Tesla was losing its pricing power.
-
Tumbling sales in California, major markets and Europe
-
The growing competition for electric vehicle charging has led Business Tesla to dominate for a long time.
The biggest thing above all is the damage the masks have done to the Tesla brand, Weingarten argues. Customers considering purchasing an EV view entrepreneurs negatively, citing data from the bipartisan group American EV Jobs Alliance.
The stakes are big. “If we reduce the $135 price target, which some analysts expect, the resulting losses will be 1.2% of the asset owners' total S&P 500 indexed portfolio,” she writes.
Some Tesla investors are worried that Musk's political work will distract Tesla and alienate potential buyers both at home and abroad. Others wonder how Musk will respond to his own fiscal impact from Tesla's decline assessment.
This is what's going on
Tariff worries will be hit by European stocks and the euro. President Trump said Wednesday that he would impose a 25% tax on European cars and other goods, pushing stocks below Mercedes-Benz and Volkswagen on Thursday. Separately, the Agriculture Department said it plans to increase egg imports amid the shortages worsened by the avian flu. (In 2015, when the US faced such an outbreak, it turned into a Dutch egg.)
Washington pushes back harder against Day Trump called on Apple to abandon its diversity, equity and inclusive policy the day after the tech giant's shareholders rejected a proposal by a conservative group to do so. And Trump's elected president to run the Justice Department's Civil Rights Division, Hermet Dillon, told the senators that target's efforts to hire more black workers may be illegal. The latest move has been born as Corporate America is already expanding its diversity initiative.
Eli Lily pledges to invest and hire in the US. The drug maker said it will create thousands of jobs and spend $27 billion to build four new plants. Since President Trump took office, making such a big investment promise is the latest corporate giant.
Good, not great
A tough crowd. Nvidia's shares were up Thursday in chip makers and post-artificial pre-market transactions Intelligence darling beat, but I didn't do it Blow away the estimated Wall Street sky.
European and Asian chip stocks have also wobbled as investors worry about the AI boom losing its steam. In addition to these concerns, Nvidia said the Washington trade war was a factor in the massive decline in China's revenues, and Nvidia's CFO Colette Kress warned that President Trump's tariffs added a huge “unknown” to the business outlook.
Just: Microsoft is set to urge the White House to roll back AI chip export controls in countries such as India, Israel, and Switzerland, the Wall Street Journal reports.
Analysts haven't seen the end of the AI spending boom. Nvidia is one of the billions of benefactors spent by businesses, particularly high-tech giants, on data centers and high-end chips. “AI is moving forward at the speed of light,” chipmaker CEO Jensen Huang told analysts.
Even the rise of low-cost Chinese AI startup Deepseek has not slowed its enthusiasm, Huang said it is addressing key investors' concerns.
If anything, Nvidia suffers from numerous lawswhich means that Tripp Mickle of the Times pointed out. This means that the company's incredible growth makes it even more difficult to surpass Wall Street estimates quarterly.
To WIT, Nvidia's fourth quarter revenue was $39.3 billion, or about $1 billion, than the consensus estimate. It's the smallest beat in two years. “It's slightly overwhelming,” explained Logan Park, an analyst for Edward Jones.
Drill Down:
-
Profit increased 80% from the fourth quarter of 2023 to $220.9 billion.
-
Nvidia forecasts approximately $43 billion in sales this quarter. This is ahead of the analyst average estimate of $42.3 billion, but far from the top range of $48 billion.
-
Blackwell, the latest high-end chip, was a major revenue driver for the last quarter, donating around $11 billion to sales. However, Nvidia warned that gross profit margins could suffer as it strengthens processor production.
Will Bezos chase WSJ subscribers?
Jeff Bezos made a rather surprising move on Wednesday.
In a note to staff at the Washington Post, he announced that the editorial page would “write daily in support and defense of two pillars of personal freedom and the free market,” wrote Edmund Lee of Dealbook. It deviates completely from the essay tradition of publishing various opinions.
Let's break it down. First, the “pillars” that date back to Adam Smith explain the same philosophy that led the Wall Street Journal's editorial page, “Free People, Free Markets,” for over a century. The journal's editorial page cheered on Bezos' moves, adding, “It's good to have a wingman in the fight.”
(David Shipley, editor of the Post, resigned after not talking about Bezos from the changes, the Times reports.
Bezos is working on changing the business strategy of the paper. And shifts in editing pages can be seen as appealing to journal readers. The journal editor took a jab with Bezos on the kicker. “We're going to sample the competition, but we're coming back for the real thing.”
There is a limited market for news subscribers. Left. Look at the distribution of the total newspaper, which is about 20 million (combined with printing and digital), in the US, which is down sharply from its peak at over 60 million in the 1990s, according to Pew. The Times has over 11 million global subscribers. The journal has over 4 million subscriptions. There are 2.5 million posts. Most people tend to pay for one news subscription.
In other words, there is very little headroom. Digital distribution has transformed the news business into a proposition that wins. All subscribers tend to lose Times or Journal benefits from Posts.
The post is bleeding. When Bezos purchased the paper for $250 million in 2013, its sales had fallen for years. Last month, he fired 4% of his staff and lost $77 million in 2023.
More than 300,000 subscribers have been cancelled in protest after Bezos killed Vice President Kamala Harris' planned approval. A wave of newsroom exile continued. Some people went in the times. Others in the journal.
It brings us back to our headings. Bezos doesn't just organize editorial mantras for the journal. The paper's CEO Will Lewis and his editor Matt Murray came from the Journal.
When Andrew asked Bezos about his plans to save his paper at the Dealbook Summit in December, the Amazon founder said he only had “a lot of ideas.”
But another comment probably said more. When asked what he thought of President Trump calling the media “the enemy of the people,” Bezos said he would convince him if he wasn't. “Let's persuade you of this,” he said. “Let's talk to him.”
Fill your power challenges with robots
Among the first moves in President Trump's second term was to declare a national energy emergency, an initiative that includes strengthening the country's electricity grid and boosting production to support electricity projects such as artificial intelligence data centers.
To seize it, NAES Corporation, a leading provider of plant operations and maintenance services, said Thursday it had signed a more than $100 million contract with Gecko Robotics, a startup to deploy robots and AI.
what's happening: Gecko's robots will be testing, researching and more on plants run by NAES – the company has a presence across more than 250 nationwide, with the aim of being deployed in three to five factories within the next 12 months. This partnership could lead to NAES licensing the technology to other utility operators.
Backstory: Gecko, 12, was founded by two university graduates after building a robot and scanning the walls of a local power plant in trouble. Since then, the Pittsburgh-based company has signed government and corporate clients, including the US Navy and mining giant Rio Tinto.
The company has raised $222 million so far, including a $173 million round in 2023 led by investors like the Peter Thiel's Founders Fund.
NAES CEO Mark Dobler said he was impressed with Gecko's story after CEO Jake Loosararian spoke at the All-Insummit last fall. The two began to discuss how to work together – Trump's declaration provided the final product.
Why is it important: Dobler and Loosararian told Dealbook that the electricity industry is under increasing pressure. The Trump administration's energy policy includes faster construction of new plants, but existing utilities need to be more productive, especially given the growing demand for grids.
Every time Dobler hears a discussion about the need to train Nvidia chips and AI models, he says, “Listen to Kilowatts.”
At the same time, up to a quarter of the utility industry's workforce is expected to retire for the next decade or so. “A labor shortage is really important right now,” Rusarian said.
They also bet on the growing popularity of robotics. Field startups are making huge sums.
Speed is read
transaction
Politics, policy, regulation
Best remaining
-
“A disastrous acquisition exposes fuzzy mathematics in private equity transactions” (Bloomberg)
-
Gene Hackman is the leading Hollywood man who made him a film star for decades, and was found dead on Wednesday. He was 95 years old. (NYT)
I want feedback! Please email your thoughts and suggestions to dealbook@nytimes.com.
