Tesla Inc. (NASDAQ:TSLA) fanatics rejoice!
The controversial electric car stock halted its slide Thursday after management filed for a $650 million stock offering.
That’s right: Tesla essentially admitted it desperately needs cash, and the stock promptly rallied more than 4%.
A rational investor would probably assume a stock would tank after announcing a plan to offer 2.7 million shares of additional common stock, even if Elon Musk is going to fork over $10 million for some of those shares.
Unfortunately, the stock market is not a rational place. Maybe shareholders are interpreting Tesla’s fundraising efforts as a bizarre show of honesty, or an admission that the business needs to improve. But aside from polling his Twitter followers about the existence of alternate futures and timelines, Elon Musk hasn’t uttered a peep about the planned offering.
Either way, yesterday’s rally might turn into nothing but a brief reprieve for Tesla shares. This is one ugly chart:
Next up: Fake meat has officially taken the stock market by storm.
Beyond Meat Inc. (NASDAQ:BYND) shares debuted on the Nasdaq early Thursday, sparking an IPO feeding frenzy on Wall Street.
Sensing an acute interest in the new listing, the company was looking to increase its valuation to $1.5 billion earlier this week. An opening at the higher end of its range would mean shares would go for as much as $25.
But Beyond never even dropped below $45 when the stock opened for trade shortly after noon. Eager buyers drove the stock to a high of nearly $73 before it finally closed at $65.75, printing a gain of more than 160% on its opening day.
“It was the biggest-popping IPO for a U.S. company with a market cap of at least $200 million since 2000, according to Dealogic data,” MarketWatch reports. “That was when Palm Inc. made its debut in March 2000, at the peak of the dot-com boom. The last comparable pop in U.S. markets came in December 2010, when Chinese internet company Youku.com rose almost 115% in its debut on the New York Stock Exchange.”
Is the Beyond Meat IPO proof that the market is getting a little too frothy? Or will this sudden wave of fake-meat hysteria fuel an extended rally?
Either way, I’m sure the folks running Beyond Meat competitor Impossible Foods are kicking themselves for not getting to the public markets first.
Finally, what’s going on with gold?
The last time we took a close look at precious metals, gold was perking up again, jumping back above $1,300 after finding support near its March lows.
As we’ve discussed many times this year, gold built a monster base since it registered its bear-market lows in late 2015. Over the past three years, gold has bounce off its lows near $1,050 and attempted several rallies that have all failed before hitting $1,400.
Last month, it looked as if a five-month rally was setting the Midas metal up for its most important breakout in more than a decade. It even looked as if gold related investments were ready to make another run. The VanEck Vectors Gold Miners ETF (NYSE:GDX) was bouncing off its March lows, confirming a major change in character in GDX compared to last fall when the miners found news lows as gold stabilized in the $1,200 range.
But gold (and the miners) have failed to follow-through to the upside. Gold hasn’t been able to reclaim $1,300 since slipping below this mark a few weeks ago. In fact, the Midas metal has failed to gain any traction at all recently, slipping to new year-to-date lows near $1,270 this week.
The action we’re seeing right now proves gold is going to need more time before making a serious push toward breakout levels. An ugly trading week for the miners has also pushed GDX back below its 200-day moving average for the first time since January.