📊 Elon Musk's Net Worth Hits $270B

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Happy Sunday!

Earnings season is in full swing and there’s been a ton of news this week.

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Some key data bites from this week that you should know:

• Stripe has acquired crypto stablecoin platform Bridge in a $1.1B deal.

• Apple has reportedly cut iPhone 16 orders by 10M units.

• Walmart plans to deliver US prescription medications within 30 minutes.

• Goldman Sachs predicts the S&P 500 will have a 3% annual return over the next decade.

• Bill Gates has allegedly backed Kamala Harris with a $50M donation.

• McDonald’s E. coli outbreak has led to 75 illnesses across 13 states.

• Tesla added over $150B to its market cap this week.

• Elon Musk’s net worth has climbed to $275B.

• Starbucks saw Q4 global comparable sales decline 7% and suspended guidance for next year.

• J&J’s ketamine-derived drug is expected to surpass $1B in sales this year.

• The NYSE announced a plan to extend trading to 22 hours a day on its exchange.

• Gucci’s parent, Kering, warned 2024 operating income will fall roughly 47%.

In today’s newsletter:

• 🔱 Gold Reaches All-Time Highs

• 🍿 Netflix Dominates Streaming

• 📈 Never Ending ZYNdemic

• 🔋 Tesla’s Q3 2024 Earnings

• 🥤 Coca-Cola vs PepsiCo

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Gold is shining bright.

• The precious metal has surged 34% this year, surpassing $2,740/oz and outpacing the S&P 500’s 22% return.

What’s driving this? 

• The conflict in the Middle East, uncertainty around the U.S. presidential election, expectations of lower U.S. interest rates, and increased global central bank purchases.

In fact, net central bank buying hit 483T in the first half of 2024, a 5% increase from the previous record of 460T in the first half of 2023, per the World Gold Council.

• And according to Bloomberg, even Costco can’t keep up with customer demand—77% of surveyed locations were sold out of gold in the first week of October.

If you're having a bad day, just remember—Bill Ackman sold Netflix near its recent bottom.

• In January 2022, Ackman disclosed a $1.1B position in Netflix, buying 3.1M shares after the stock tumbled due to growth concerns. 

• But after just three months, following a poor earnings report that sent the stock down 35%, he completely closed out his stake, losing $430M.

In a conversation with CNBC’s Scott Wapner, Ackman explained he sold because Netflix's plans to adopt an ad-supported model and crack down on account sharing introduced too high of a degree of uncertainty.

Since then, Netflix has soared 250% and is trading near all-time highs. 

In Ackman’s defense, hindsight is 20/20 and things at Netflix definitely looked bleak at the time when he sold.

That said, the very strategies that concerned Ackman have appeared to work out well.

• More than 50% of Netflix’s new subscribers are currently choosing the ad-tier.

• Today, Netflix boasts 283M subscribers, far ahead of Disney+ at 154M, HBO Max at 103M, and Paramount at 68M.

Philip Morris might as well rename itself to "Printing Money."

The maker of Zyn nicotine pouches surged 10% to an all-time high after a strong earnings report:

• Adj. EPS: $1.91 vs. $1.82 Est.

• Revenue: $9.91B vs. $9.68B Est.

Year-over year, adjusted EPS grew 14.4%, while net revenue rose 8.4%.

The company’s shift toward a smoke-free future continues to see momentum. 

• Organic net revenue for its smoke-free business jumped 16.8% YoY, with gross profit up 200 bps to 20.2%. 

• Smoke-free products now account for 38% of total net revenue and 40% of gross profit.

Combustible products, like cigarettes, also saw 8.6% net organic revenue growth and a slight increase in gross profit.

However, the company’s most prized possession, Zyn, continues to steal the spotlight.

• U.S. shipments reached 149M cans in Q3, totaling a record 532M over the last year. 

• Despite a small dip, Zyn still holds 65.5% of the U.S. nicotine pouch market and continues to expand globally, now available in 30 markets.

Building on this progress, there’s no smoke clouding Philip Morris’ future. 

• The company raised its full-year 2024 adjusted earnings forecast to $6.48 at the midpoint, up from $6.39.

Elon decided to shift into overdrive in Q3.

Tesla reported earnings on Wednesday, sending the stock up roughly 23% this week. Here's the breakdown:

🟢 Adj. EPS: $0.72 vs. $0.58 Est.
🔴 Revenue: $25.18B vs. $25.37B Est.

GAAP net income hit $2.2B, up 17% YoY, while free cash flow surged 223% to $2.7B. Tesla now holds $33.6B in cash and investments, up 29% from last year.

Gross margins expanded 195 bps to 19.8%, and operating margins rose 323 bps to 10.8%, thanks to several factors:

1. Regulatory credit revenues grew as other automakers purchased credits from Tesla to meet emission requirements.

2. Cost of goods sold per vehicle dropped to $35.1K, a record low.

3. Tesla's energy generation and storage business hit a record gross margin of 30.5%, with Powerwall deployments reaching new highs.

4. Vehicle deliveries increased 6% YoY.

5. Operating expenses decreased 6%, totaling $2.3B.

Other Q3 highlights include surpassing 2B cumulative miles driven on FSD (supervised) and making Cybertruck production profitable.

During the earnings call, Elon mentioned Tesla could achieve 20-30% vehicle growth over the next year.

Consumers of Coca-Cola and Pepsi seem to be losing their fizz.

On Wednesday, Coca-Cola reported earnings that beat expectations on both the top and bottom lines.

• Organic revenue grew 9%, but global unit case volume dropped 1%, driven by weaker demand in China, Mexico, and Türkiye.

• North America saw flat volume growth.

How did sales rise despite declining volume? Price increases.

• Coca-Cola raised prices by 10%, helping boost revenue.

• That said, Coke’s CEO James Quincy said consumers are “exhibiting value-seeking behavior, such as looking for combo deals or opting for smaller packages. At the same time, premium brands like Fairlife and Coca-Cola Zero sugar continue to perform well.”

Pepsi is facing similar challenges.

• In its Q3 report from earlier in October, PepsiCo saw organic revenue grow just 1%, while beverage volume fell 2% across all regions.

Here’s an interesting fact: while Coca-Cola may be more recognizable, PepsiCo, Pepsi’s parent company, generates double Coke’s revenue.

• PepsiCo’s diversified portfolio, which includes popular snacks like Lay’s and Doritos, alongside beverages, drives its larger scale.

Notable Companies Reporting Earnings This Week:

Here’s what I will be watching this week:

• Monday: ON Semiconductor $ON, Waste Management $WM, Cadence Design Systems $CDNS, Ford $F

• Tuesday: McDonald’s $MCD, Pfizer $PFE, American Tower $AMT, PayPal $PYPL, SoFi $SOFI, Alphabet $GOOG, Visa $V, AMD $AMD, Stryker $SYK, Chipotle $CMG, Electronic Arts $EA, Snap $SNAP

• Wednesday: Eli Lilly $LLY, AbbVie $ABBV, Caterpillar $CAT, ADP $ADP, Microsoft $MSFT, Meta $META, Amgen $AMGN, Starbucks $SBUX, KLA $KLA, DoorDash $DASH, MicroStrategy $MSTR, Coinbase $COIN, Robinhood $HOOD, Twilio $TWLO

• Thursday: Mastercard $MA, Merck $MRK, Uber $UBER, Altria $MO, Roblox $RBLX, Apple $AAPL, Amazon $AMZN, Intel $INTC, Atlassian $TEAM

• Friday: Exxon-Mobil $XOM, Chevron $CVX, Enbridge $ENB, Charter Communications $CHTR, T. Rowe Price $TROW

I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls.

• If you’d like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out!

Buys

• Marjorie Taylor Greene (R)

  • Company: Berkshire Hathaway ($BRK.B)

    • Amount Purchased: $1K - $15K

  • Company: Intel ($INTC)

    • Amount Purchased: $1K - $15K

  • Company: Microsoft ($MSFT)

    • Amount Purchased: $1K - $15K

  • Company: Tesla ($TSLA)

    • Amount Purchased: $1K - $15K

Sells

• Rick Allen (R)

  • Company: Charles Schwab Corp. ($SCHW)

    • Amount Sold: $15K - $50K

• Tom Suozzi (D)

  • Company: Apple ($AAPL)

    • Amount Sold: $15K - $50K

Buys

• Five Point Holdings ($FPH)

  • Insider: Sam Levinson (Director)

    • # of Shares Purchased: 3,283,024

    • $ Amount: $10,341,526

    • SEC Forms: [1]

Sells

• Nuvalent ($NUVL)

  • Insider: James Flynn (Director)

    • # of Shares Sold: 2,000,000

    • $ Amount: $195,500,000

    • SEC Forms: [1]

• General Motors ($GM)

  • Insider: Mary Barra (Chair & CEO)

    • # of Shares Sold: 506,824

    • $ Amount: $27,029,630

    • SEC Forms: [1]

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