The Rundown - Tesla Seeks New Vote on Musk's $56B Pay Package, United Airlines Shares Rally on Upbeat Guidance

Episode Date: April 17, 2024

Stock Market update for April 17, 2024. Check out the ⁠⁠Leading Indicator⁠⁠ podcast by Public.com. Get started with Public: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Click here⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, April 17th. In today's episode, we dive into the latest comments from Jerome Powell and what it means for the stock market and you. Also, Tesla is trying to give Elon billions of dollars. And a popular video game maker announced layoffs and is cutting some projects. Finally, stick around to the end of the show to find out how many subscribers Amazon Prime has. All right, let's go.

Well, guys, the S&B and NASDAG both dropped a bit on Tuesday, but it probably could have been a bit worse after the comments that Jerome Powell made yesterday. Fed Chair Jerome Powell was speaking at a forum in D.C. yesterday. I think he was hanging out with the governor of the Bank of Canada. And during this talk, Jerome Powell said that recent data has clearly not given the Fed enough confidence to cut rates anytime soon. You know, Fed officials sometimes like the talking code and not give direct answers. That seemed pretty direct to me. I don't think the Fed is comfortable cutting rates anytime soon. We've had four straight months of hotter than expected CPI reports,

and the latest CPI report showed that inflation was at 3.5% in March, which is higher than the Fed's target of 2%. On top of that, if you add in the fact that the job market continues to stay pretty hot, the Fed doesn't have any reason to cut rates anytime soon. I've been saying this for a couple weeks now on this show, but don't be surprised if we get no rate cuts this year. We're going to hear more from Jerome Powell at the next Fed meeting, which starts on April 30th,

and ends with a Jerome Powell press conference, on May 1st. Also, I think investors have accepted the reality that we're not going to be getting rate cuts anytime soon. And maybe the impact of high interest rates is being overstated a bit. In fact, there are some people that want interest rates to stay higher, like everyone that has money in a savings account. If interest rates continue to stay higher, they're going to earn more interest from their savings. But this is bad news for anyone that was trying to get a 30-year mortgage, because with interest rates staying higher for longer, mortgage rates are unlikely to come down significantly anytime soon. All right, let's run through some headlines. Tesla is trying

to pay Elon billions of dollars again. Now if you guys remember about three months ago, a judge in Delaware voided Elon's pay package that Tesla had given him back in 2018. This pay package back in 2018 gave Elon the right to purchase 304 million shares of Tesla at a locked in price of $23 a pop. And at one point, this pay package was valued at over $59 billion, but only if Elon was able to achieve some performance milestones. And there were some pretty difficult milestones to achieve. But since 2018, Elon was able to pull them off. But a judge in Delaware voided that pay package, calling the pay package, and I quote, an unfathomable sum that was unfair to shareholders as a result of a flawed process with improper disclosures. Fast forward to today, the test of board

directors is putting the pay package up for a shareholder vote again at the June shareholder meeting. This time, the board of director says the shareholders have all the disclosures that they need. Now, 73% of shareholders approve the original pay package back in 2018. I'm not a lot. I'm not sure sure if it's going to have the same level of popularity this time around, because, I mean, it's not great timing right now. Tesla stock hasn't been doing so great lately. So I wonder how the shareholders are going to react to this. Now, to be fair, the pay package is only worth $47 billion now because of the drop in Tesla's

stock price. But it would still be the richest corporate pay package ever in U.S. history, according to the New York Times. So we'll see if Tesla's lackluster's performance will impact the shareholder vote this time. We'll find out in June. Speaking of lackluster, let's talk about Take 2 Interactive, the parent company behind Grand Theft Auto. this morning that they are laying off 5% of their staff and canceling several projects that are

already in development. This move by Taitu Interactive is part of a cost reduction plan. They kind of hinted at this back in February. These cuts are expected to save Tate 2 Interactive about $165 million in annual costs. But, you know, just last month, the CEO of Tateau Interactive said there was no current plans for layoffs. So the job cuts do come at a bit of a surprise. And I think the bigger picture is that the video game industry has been downsizing over the last

few months anyways. PC and console gaming aren't growing anymore after seeing a huge surge in playing time during the pandemic. In fact, the average quarterly playtime was down 26% from Q1-20201 through Q4, 2023. But maybe Grant that Auto 6 will change things

if it ever comes out. GTA6 is slated to launch in 2025. But, you know, I'm not getting my hopes up. All right, let's talk about some stocks making moves today. Shares of United Airlines are up more than 5% this morning after the company reported better than expected Q1 earnings and a positive Q2 outlook. United reported double-digit business growth in Q1 compared to pre-pandemic levels.

And while they did report a loss in Q1, the company said it would have been profitable in Q1, if not for the forced grounding of the Boeing Max 9 planes in January, which United has a ton of. Those groundings cost the airline $200 million. So we'll see if they can bounce back from the Boeing drama. Investors seem to be liking what they heard so far. On the flip side, company not doing so great this morning is Urban Outfitters. The shares of Urban Outfitters are down more than 4%. After investment bank, Jeffries downgraded the retailer to underperform with a price target of $32 a share.

The stock is currently trading around $36 a share at the time of this recording. Jeffries is worried about lower foot traffic at Urban Outfitter locations, which is down to low single-digit growth compared to double-digit growth at the end of 2023. I'll be honest with you guys. I haven't been to Urban Outfitters in years. All right, let's wrap the show with a fun fact. Today's fun fact is about Amazon Prime. Amazon Prime has over 180 million members in the U.S. That's up 8% from a year ago. I mean, that's more than 50% of the U.S. population.

This recent data is from Consumer Intelligence Research Partners, and they indicate that 75% of U.S. shoppers are Amazon Prime members. Now, just to make something clear, the 180 million number isn't the number of people that are paying Amazon 140 bucks a year or 15 bucks a month for the Amazon Prime subscription. That number is just how many people have access to Amazon Prime because many households share Amazon Prime accounts, you know? Could you imagine if Amazon actually started cracking down on password sharing?

Nobody forwarded this episode to CEO Andy Jesse, okay? Let's not give them any ideas. Well, all right, that's all I got for you guys today. If you guys enjoyed today's show, consider giving us a five-star rating on Apple and Spotify. We're about to hit 1,000-5-star ratings on Spotify. One of you guys listening to the show could be the 1,000-5-star rating. If you haven't done so yet, hit us with that five stars on Spotify. Thank you guys again for listening.

Shout out to Mike and Connor for all the work behind the scenes. We'll see you guys back here tomorrow. This is the rundown, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Rundown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consider. Respected professionals. Learn more at public.com disclosures. In partnership with Zaididmani,

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