Pocketing Profits While Billionaires Bicker
Stocks are tanking — and the billionaires are bickering.
As tech shares slide deeper into the red to begin the second quarter, the heroes of Silicon Valley are eating their own.
Apple CEO Tim Cook is kicking Facebook while it’s down, claiming in a recent interview that Apple could rake in some serious cash if it monetized customers’ info, but the company has decided not to go that route.
King Zuck wasn’t having it. The Facebook CEO fired back in a separate interview, calling Cook’s comments “glib” as he continued to defend his company’s desire to provide a “service that helps connect everyone in the world.”
It’s reassuring to see that the world’s wealthiest business leaders act just like you and me. The tech elite grew sluggish and complacent as the runaway stock market melt up lined their pockets with cash. Now they’re spinning their wheels in the mud as their very own stocks can’t catch a bid.
But Tim and Zuck’s little scuffle is nothing compared to the weekend’s top CEO freak-out. Tesla’s own Elon Musk thought it would be a good idea to participate a bizarre April Fool’s joke. In a series of tweets, Musk announced that his company had filed for bankruptcy.
The tweetstorm culminated in a shot of a “passed out” Elon, surrounded by “Teslaquilla” bottles, the tracks of dried tears still visible on his cheeks.
I can only hope he was dreaming of better times.
Musk’s little prank is especially tone-deaf when you consider recent concerns regarding Tesla’s financial health, the ongoing NTSB probe of the deadly Model X fire, and reports that the company will come up short on its Model 3 delivery goals again.
Needless to say, investors weren’t impressed by Musk’s little gag. Tesla shares gapped lower to begin the week and continued to crater with the broad market. The stock was down more than 5% by the closing bell.
Tesla and its tanking tech brethren aren’t the only stocks circling the drain this week.
The entire market’s taking a beating to begin the second quarter. The Nasdaq Composite led the way lower with a drop of 2.75%. The Dow Jones Industrial Average lost more than 450 points. And the S&P finished the trading day below its 200-day moving average despite a valiant late-day rally.
I expect a little hysteria to work its way through the markets now that the S&P has lost its 200-day moving average for the first time since July 2016. The financial media is already beating this theme into the ground, spinning out every bearish scenario imaginable for the markets.
But in reality, the path forward is probably maximum pain for both the bulls and the bears. Volatile, choppy trading heading into the summer wouldn’t surprise me at all.
Moving forward, our main goal is to try and pinpoint the stocks and sectors that could lead us out of this mess. Remember, tech stocks were the undisputed market leaders of the 2017 melt up. Now that investors are kicking these names to the curb, we’re going to need to see some new market leaders emerge from the rubble.