When Tesla (TSLA) posted weak quarterly results, CEO Elon Musk skillfully re-ignited shareholder confidence by announcing a Robotaxi launch in the summer. Unfortunately, not only is demand for Tesla electric vehicles falling but Hertz (HTZ) will add to the sales slump.
Hertz is selling its fleet of Tesla’s at a substantial discount. The firm fell into the EV hype and ordered too many Tesla vehicles. Car rental customers did not like the vehicle. Hertz did not have the expertise to maintain the vehicle. Now, it will offload 30,000 EVs. CNBC reported that Hertz sold Tesla units at an average price of $25,000.
In the brokerage sector, Robinhood (HOOD) is breaking out. It will buy Bitstamp, which will expand its business to the cryptocurrency business. It will pay $200 million, undermining the SEC. Recently, the SEC sent a Wells Notice that notified the firm it may sue Robinhood for violating securities law. Bitstamp’s operations are mostly abroad, so it will have no impact on the acquisition.
In the ETF sector, ARK Invest (ARKK) manager Cathie Wood said that her firms are in a good position to take advantage of the AI wave. Unfortunately, Wood sold Nvidia stock early, selling the last position at around $400 in mid-2023. Assets managed continue to decline for the fund, falling to around $6 billion.
Investors should avoid ARKK ETF.
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