This morning, we’re launching EntryPoint — a free newsletter that’ll be published every Monday, Wednesday, and Friday before the opening bell. |
Packed with market data, macro themes mapped to micro ideas, technical signals, screens, and charts, EntryPoint will also have insights about what Robinhood* traders are actually doing, which is unavailable anywhere else. Check out our data visualization of what Robinhood traders have bought and sold this year. Subscribe to EntryPoint *Robinhood Markets, Inc. is the parent company of Sherwood Media, an independently operated media company. |
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What happens to Tesla stock when SpaceX goes public? |
For years, the Tesla and Elon Musk faithful have piled into the stock, driving huge gains even when results were uneven and pushing the company to a market value of more than $1 trillion. As Musk has shifted the company’s priorities away from producing cars, its core revenue engine, and toward an even more ambitious AI and robotic growth story, it hasn’t dampened retail enthusiasm. In fact, this year Tesla has been the second-most-traded stock by value among retail investors, data from Vanda Research shows. But that loyalty has never really been tested by a true alternative — so what will happen to Tesla when SpaceX goes public? We asked some experts: |
- Nothing: Melissa Otto, head of research at S&P Global Visible Alpha, says SpaceX’s value proposition won’t hurt Tesla’s. “Investors want to get behind stories where they feel like the company is going to create a lot of shareholder value: it’s going to outperform the index. It’s going to make great use of free cash flow and drive momentum in a way that delivers outsized returns,” she told Sherwood, adding that it’s not a zero-sum game.
- Something: Seth Goldstein, a senior equity research analyst at Morningstar, said he expects retail investors to be enthusiastic about both SpaceX and Tesla. But he sees limited retail funds as a potential downside for Tesla.
- Everybody wins: After a sell-off in the fall, retail investors have been buying Tesla again in recent weeks, according to Viraj Patel, deputy head of research at Vanda. And sure enough, the stock is up more than 20% over the past month after losing about 30% of its value from mid-December to early April.“Could it be SpaceX? Could it be some pre-positioning of earnings? Could it be their love for Tesla has just come back again? Something has happened,” he said.
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In case you’re wondering what Wall Street thinks more broadly, analysts’ price targets for Tesla’s stock had been trending down since late December, before recovering some of their ground recently. |
When considering how the SpaceX IPO will go, one comparison that keeps coming up is the SPAC rush of 2021. Back then, retail investors piled into celebrity-led blank-check companies that raised money first and figured out what to buy later. “It didn’t matter what the company was — if a certain individual was linked to it, retail bought it,” Patel said. “Rather than looking at the valuations or the bottom-up or the accounts, the sort of meme stock nature of this trade is going to attract interest.” |
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Are you overlooking the middle? |
Mid caps like MDY hit a rare balance of growth, stability, and US focus—and they may deserve a more prominent role in your long-term strategy. Explore the outperformance potential of mid caps with this tool and discover how the first mid-cap ETF delivers cost-efficient, liquid exposure to 400 US-based mid-sized companies in a single trade. MDY also gives investors the ability to invest in the next generation of industry leaders before they become household names. Innovators like NVIDIA, Netflix, Starbucks, and JetBlue Airways all started as mid-cap holdings. Get to know MDY. |
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Stories we’re obsessed with |
- The rise and fall of Duolingo: Investors were hoping Duolingo could be an artificial intelligence winner — AI would boost its content output, optimize learning, and open up new languages. But despite beating expectations on all fronts in last week’s Q1 earnings report, and even boosting its full-year profit guidance, the bears won the battle last week. We charted the soaring, then dive-bombing, stock price of the app with the green owl mascot.
- South Korea is now the seventh-largest stock market: In the past couple of weeks, the combined market cap of South Korea’s listed companies has surged past the market cap of both the UK and Canada, powered by an AI chip rally. With a remarkable 71% surge in value this year, the country now sits behind only the US, China, Japan, Hong Kong, India, and Taiwan. South Korea’s rapid rise has been led by two companies in particular, one of which is now worth more than Walmart or Berkshire Hathaway.
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- Monday: Premarket earnings: Circle, Constellation Energy, KKR & Co., Mosaic Co., and Fox Corp. Postmarket earnings: Hims & Hers Health, Plug Power, AST SpaceMobile, Rigetti Computing, MARA Holdings, Figure Technology Solutions, STERIS PLC, iHeartMedia, and CleanSpark
- Tuesday: Premarket earnings: JD.com, D-Wave Quantum, Qnity Electronics, Venture Global, and SOLV Energy. Postmarket earnings: Oklo and Lightwave Logic. April CPI
- Wednesday: Premarket earnings: Alibaba. Postmarket earnings: Cisco and USA Rare Earth. April PPI
- Thursday: Premarket earnings: Intuitive Machines and Ondas Inc. Postmarket earnings: Gemini Space Station, Figma, Applied Materials, Infleqtion, United States Antimony Corp., Blaize Holdings, Celcuity, and Navan. April retail sales
- Friday: Premarket earnings: Alaska Air
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more |
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