🏎️ Tesla's In 1st Place

Hi! In today's newsletter: 1) Tesla vs The Big 3, 2) FaZe Clan Gets No-Scoped, 3) Orange Juice Price Surge, and more!

Author

Carbon Finance
September 26, 2023

Happy Tuesday!

We have a big week coming up with Costco and Nike reporting earnings. This will help give a glimpse into how the consumer has been doing over the few months. We’ll be reviewing these earnings in Friday’s newsletter.

In today’s newsletter:

  • 📈 Tesla vs The Big 3

  • 🎯 FaZe Clan Gets No-Scoped

  • 🍊 Orange Juice Price Surge

Let’s dive right in!

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📈 Tesla vs The Big 3

The United Automobile Workers (UAW) union has been in a standoff with GM, Ford, and Stellantis. The strikes began on Sept. 15 with the union demanding wage increases, better pensions, and job security. It is estimated that the UAW strike has already cost the US economy $1.6B.

Tesla plays a significant role in these strikes due to its non-unionized status and competitive edge in the electric vehicle (EV) market. The Detroit Three automakers face challenges in offering affordable EVs, especially with Tesla's lower labor costs ($45-$50 per hour compared to Detroit's $64-$67).

Tesla's efficient production methods and in-house supply chain management have allowed it to scale rapidly, narrowing the sales volume gap with established automakers. As the UAW negotiates with the Detroit Three, questions arise about future attempts to unionize Tesla, but Elon Musk believes Tesla factories have a great “vibe.”

🎯 FaZe Clan Gets No-Scoped

In July 2022, FaZe, the gaming and social media company, went public on the Nasdaq. Originally known for its group of gamers, the company expanded into a vast network of internet personalities with over 512M followers. Despite its online success, translating this into a sustainable business proved challenging.

After hosting a lavish $1.7M party and making several high-profile deals, the company faced financial difficulties, controversies, and management disputes. Their stock, which once targeted a $1B valuation, plummeted from over $20 to just 19 cents.

As a result, the company terminated its CEO Lee Trink and its CFO Christoph Pachler will serve as its interim CEO. In March, the company received a Nasdaq delisting notice due to the company not being able to maintain a share price of $1 for ten consecutive days. FaZe recently received a 6-month extension to meet the Nasdaq’s requirements.

🍊Orange Juice Price Surge

If you enjoy drinking orange juice, I have bad news for you. Orange juice futures have reached record highs due to adverse weather conditions and a severe citrus disease. Last year, OJ futures were around $1.81/pound, but they have recently surpassed $3/pound.

Due to crop devastation as a result of hurricanes in Florida, the U.S. Department of Agriculture predicts Florida's orange production for the 2022-2023 season will be the lowest since the 1936-1937 season. Florida produces more than 90% of the US’s orange juice supply.

The climate crisis is increasingly affecting orange production globally, with other major producers like Brazil also facing challenges. Brazil is projected to export 1.7% less orange juice to the US this year.

🤖 Splunk Acquired. Cisco $CSCO is acquiring software company Splunk for $28B to enhance its AI capabilities and expand its software portfolio. [WSJ]

📸 Snapchat Growth. Snapchat's $SNAP premium service, Snapchat+, recently reached 5M subscribers, up from 4M in late June and 3M in mid-April. [TC]

💋 Tinder Select. Match Group’s $MTCH Tinder introduced an ultra-premium subscription called Tinder Select at $499/month, offering exclusive features to its most active users. [BB]

🍔 McRoyalty Raise. McDonald’s $MCD is increasing its royalty fees from 4% to 5% for new franchisees starting January 1, marking the first hike in nearly 30 years. [CNBC]

🏎️ Tesla In India. Tesla $TSLA has proposed plans to manufacture and sell battery storage systems in India, seeking incentives for a factory, while also discussing the establishment of an EV factory in the country. [R]

Notable Companies Reporting Earnings This Week:

  • Tuesday:

    • Costco ($COST), Cintas ($CTAS)

  • Wednesday:

    • Micron ($MU), Paychex ($PAYX)

  • Thursday:

    • Accenture ($ACN), Nike ($NKE)

  • Friday:

    • Carnival ($CCL)

All of the companies that are reporting earnings this week can be viewed here.

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