⚡️ Tesla: cheaper = bigger

Plus: CEO outlook | Wednesday, January 25, 2023

Open in app View in browser   Presented By ADT   Axios Closer By Hope King and Nathan Bomey · Jan 25, 2023 Hump day. 🐪 Today's newsletter is 678 words, a 2½-minute read. 🔔 The dashboard: The S&P 500 closed down, but nearly flat. Biggest gainer? MarketAxess (+10.2%), the provider of data and trading services for fixed-income markets, reported strong earnings driven by credit trading volume. Biggest decliner? NextEra Energy (-8.7%), the alternative energy company missed on Q4 revenue expectations.     1 big thing: Tesla defends price cuts Illustration: Sarah Grillo/Axios   Tesla today reported record profit and revenue for Q4 but acknowledged that it must make cheaper vehicles to become a bigger automaker, Nathan writes. Details: The company reported net income of $3.69 billion and revenue of $24.3 billion in the quarter, up 59% and 37%, respectively, from a year earlier. Both reflect its best quarterly marks ever despite a continued slowdown in the critical Chinese market. It sold 405,278 vehicles in Q4, up 31% from a year earlier. Why it matters: Tesla is under pressure to regain momentum after signs of a sales slowdown and a stock-price plunge amid a broader industry pullback and CEO Elon Musk's controversial management of Twitter. Tesla's stock lost about two-thirds of its value in 2022. What they're saying: Tesla acknowledged Wednesday in an earnings presentation that its prices are "on a downward trajectory," but said it's "necessary to become a multimillion vehicle producer." The company pledged "relentless cost control and cost innovation" to preserve profit margins. The big picture: What investors are most interested in is whether its recent round of across-the-board price cuts will pay off. "All eyes are going to be on what does that do in terms of helping sales and what does it do to profit margins," Autotrader analyst Michelle Krebs tells Axios. Context: Two weeks ago, Tesla cut prices of its U.S. vehicles by a weighted average of $10,000, according to Evercore ISI. Those cuts are not reflected in the fourth-quarter earnings report. Go deeper.     2. Exclusive: CEO insights Data: SoftBank Vision Fund; Chart: Axios Visuals Hiring and retaining people for high-growth tech companies has become easier as economic conditions have changed, new insights from a global survey of CEOs show. The findings are the latest indication that the tech sector is undergoing a massive talent reshuffling, Hope writes. Driving the news: More than 70% of CEOs who lead a portfolio company of SoftBank's Vision and Latin America funds say that talent acquisition (74%) and retention (72%) were easier in 2022 than in 2021, according to a November 2022 SoftBank Investment Advisers survey shared first with Axios. A separate survey from ZipRecruiter previously found that about 80% of recently laid-off tech company workers found a new job within three months of starting their search. What they're saying: "The [tech] industry is nowhere near done with layoffs [as it] struggles with making this chasm shift from ... 'How do we grow as fast as possible' to 'How do we get more efficient about our growth,'" Lydia Jett, managing partner at SoftBank Investment Advisers, told Axios in an interview. Keep reading.     3. What's happening ⛈ California flooding estimates show billions in economic losses. (Axios) 🛢 Chevron announced a $75 billion stock buyback and dividend boost. (CNBC)     A message from ADT Leave your worries at the door     It's time to install a home security system this new year. Here's the deal: Through Jan. 31, ADT will install your Google Nest Doorbell for free* — and give you a $100 Visa Rewards Card. Get a free quote. *Requires a 36-month contract with ADT Video or Complete. For full terms and pricing, see website.     4. Costly allegations Adani Group chair Gautam Adani. Photo: Indranil Mukherjee/AFP via Getty Images   An India-based multinational conglomerate, run by the world's fourth-richest person, lost $12 billion in market value after coming under attack from a short-seller, Axios' Pete Gannon writes. Details: Hindenburg Research accused Gautam Adani and his Adani Group companies — which span industries from energy and transportation to airports and finance — of "brazen stock manipulation and accounting fraud schemes" over the course of decades. The allegations include a greatest hits of corporate fraud stories, including tax havens, offshore shells, capital siphoning, money laundering and tax theft. What they're saying: The report is "a malicious combination of selective misinformation and stale, baseless and discredited allegations," Adani CFO Jugeshinder Singh said in a statement, per Bloomberg. Of note: Short sellers profit from driving down the price of a company's publicly traded shares and bonds. Yes, but: Hindenburg, run by Nate Anderson, is a "renowned short seller" with a strong record, Bloomberg Intelligence analyst Nitin Chanduka told the publication.   Share Axios and earn rewards If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. Be a good friend and share   5. The music business is good Justin Bieber performs at the Sziget Festival 2022 in Budapest, Hungary. Photo: Joseph Okpako/WireImage/Getty Images   Justin Bieber is setting records. The 28-year-old finalized the sale of his music catalog to U.K. investment firm Hipgnosis yesterday, reportedly the biggest such sale for any artist not yet collecting social security. Details: Financial terms were not disclosed, but the deal is valued at an estimated $200 million. Go deeper.     6. What they're saying "This whole process was really about our decision on our terms." — Nick Clegg, Meta's president, global affairs, to Axios' Sara Fischer on the decision to reinstate Donald Trump on Facebook.     A message from ADT Leave your worries at the door     It's time to install a home security system this new year. Here's the deal: Through Jan. 31, ADT will install your Google Nest Doorbell for free* — and give you a $100 Visa Rewards Card. Get a free quote. *Requires a 36-month contract with ADT Video or Complete. For full terms and pricing, see website.   Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller. Why stop here? Let's go Pro. Join the thousands of professionals using Axios Pro to keep up with the companies, deals and trends changing their industries.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. 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