Despite another round of personnel turbulence in the White House, investors shrugged it off on Monday to essentially set the stage for a breakeven. The S&P 500 Index’s close of 2,470.30 was only 0.07% worse than Friday’s last trade, with most investors still waiting to see how this week’s bevy of economic news and earnings reports (July’s unemployment report scheduled for Friday, most of all) pan out before making a firmer decision.
Not every name was stagnant on Monday, however. Discovery Communications Inc. (NASDAQ:DISCA), Twitter Inc (NYSE:TWTR) and Tesla Inc (NASDAQ:TSLA) were all pretty well torched for reasons that weren’t terribly surprising. Here’s what traders need to know about each setback.
Tesla Inc (TSLA)
It should have been a bullish catalyst. But, as has been so often the case, Tesla CEO Elon Musk said one thing too many, and the market fixated on the flaw, sending TSLA shares lower to the tune of 3.5% on Monday.
The catalyst could have been a no-holds-barred party to deliver the thirty first-even Model 3 cars to their owners. In true Tesla fashion, it was more about the publicity than the logistics of the electric vehicle’s production. But, when Musk added that the company would now be entering “manufacturing hell” in order to ramp-up output of the Model 3.
TSLA shareholders interpreted the glass as being half-empty, recognizing that the goal of being able to build 20,000 cars per month by the end of the year was a monumentally tall task for the company that only sold about 76,000 vehicles in all of 2016.
Twitter Inc (TWTR)
For all intents and purposes, it looked like the post-earnings plunge from Twitter was almost done. TWTR shares plunged 13% on Thursday after so-so fiscal results were marred by non-existent growth in the number of users that log in monthly. But, the next day — Friday — the stock barely budged, suggesting traders had punished it enough.
It looks like the bears were just taking a breather though. TWTR stock lost another 3.9% of its value today following news that it’s now offering a subscription-based service for advertisers. Although charging $99 per month to promote tweets seems like a savvy idea on the surface, more than a few observers believe the initiative marks the beginning of the end for the microblogging platform in that it will annoy users to the point where they stop checking their feed altogether.
Discovery Communications Inc. (DISCA)
Finally, shares of television content and distribution company Discovery Communications tumbled 8.2% today following reports that it would be acquiring rival television content producer and channel manager Scripps Networks Interactive, Inc. (NASDAQ:SNI), to the tune of $14.6 billion.
It’s a good fit. Both organizations function as the message-maker and the messenger, and melding the two only gives the combined companies more negotiating power with cable companies … or better yet, a more robust package it can sell directly to consumers.
Nevertheless, news of the second-quarter earnings and revenue misses for Discovery Communications spooked the market, suggesting the paired company may still be running into a headwind.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.