If there was a theme to earnings from the big guns of Apple, Facebook and Tesla reporting overnight, it was in their collective uncertainty about the coming year.
Apple shares are down nearly 2 per cent today after it declined to offer any guidance for the fourth quarter in a row, citing uncertainties around the pandemic. “It becomes very easy for things to get really difficult, really quickly,” finance chief Luca Maestri said, adding that many Apple stores remain closed in the Americas and Europe. The company and analysts expect decelerating growth for its wearables and services in the coming months.
Facebook has benefited from lockdown and working from home trends, just like Apple, and it echoed its warning. “We continue to face significant uncertainty as we manage through a number of cross-currents in 2021,” it said, with the influence of the pandemic expected to wane: “In the second half of the year, we will lap periods of increasingly strong growth, which will significantly pressure year-over-year growth rates.” It also fears an ad hit from Apple’s planned privacy changes in iOS 14 this year.
Tesla shares are down more than 3 per cent today as its profits fell short of expectations. They continue to be buoyed by regulatory credits it sells to other carmakers, but as its rivals begin to produce their own electric vehicles, analysts fear demand for Tesla’s carbon-friendly credits will fall. Commercial pressures will intensify this year with a slew of electric models expected and Tesla’s Model 3 is already behind the Renault Zoe, Volkswagen ID. 3 and Hyundai Cona in sales in Europe. It is revamping its Model S though (see Tech Tools below). General Motors said today it aimed to stop selling petrol or diesel cars by 2035
Meanwhile, Samsung issued its own warning for 2021 alongside earnings on Thursday. It said a global semiconductor shortage that has hit global carmakers could also disrupt orders for the memory chips used in smartphones.
1. Reddit-led surge beats 2008 record share volumesThe frenzied battle between Reddit’s amateur investors and hedge funds pushed trading volumes on Wall Street on Wednesday past a peak set at the height of the financial crisis in 2008, with more than 24bn shares changing hands. Online brokers have been imposing new trading limits for shares including GameStop and AMC, prompting a backlash. The head of the world’s largest sovereign wealth fund is worried about developments.
2. SoftBank execs sitting on big gainsFour top SoftBank executives, including Rajeev Misra and Marcelo Claure, are sitting on a potential collective gain of as much as $1.2bn after receiving unusual loans from the company last year to buy its shares. SoftBank approved incentive packages in February last year that granted more than $600m in loans to the four men, allowing them to buy shares that have rallied sharply.
3. Viewers stream to streamersComcast reported Peacock, the streaming service launched by NBCUniversal in April last year, had 33m subscribers, exceeding expectations. A day earlier, AT&T had reported subscribers to HBO Max had climbed to 61m worldwide in its latest quarter. Alex Barker sees sport playing a bigger role in streaming companies’ offerings.
4. DoorDash leads in store deliveriesDelivery app orders from US convenience stores such as 7-Eleven and CVS jumped 346 per cent in 2020, as pandemic lockdowns gave food-delivery companies an opportunity to expand beyond restaurants. DoorDash emerged as the dominant player in the US after formally launching its convenience store service in April.
5. Facebook Giphy deal iffy?The UK competition regulator has launched a formal investigation into Facebook’s $400m acquisition of online image platform Giphy, citing concerns over the deal’s potential impact on consumers. Meanwhile, Facebook’s oversight board has issued its first ever rulings, overturning several decisions by the company to remove posts for violating policies on hate speech, violence and other issues.
Clubhouse has been a pretty lonely place for Europeans since the invite-only social media app launched in the US last year, with big money investor backing and celebrity endorsements. That is, until now. The hottest social app in town has turned its growth-hacking sights on the European market, leading to an explosion of growth in recent weeks and with some of the biggest names in tech now hosting regular panels and discussions. The success of the social app has already led to some tough questions in Europe though. It may have, of course, already collided with European data protection regulations. There are concerns over moderation and diversity on the platform. There is also a bigger question: can it keep this momentum going?
Elsewhere in European start-ups this week, the reverberations of the GameStop saga — with participants on the r/WallStreetBets subreddit pushing up the stock price of the gaming retailer — are being felt as trading apps such as Trading212 and Freetrade have suffered from outages amid the huge demand. There has also been a move towards a bright new future where we all travel around by flying car following an announcement that the UK’s first air hub for flying taxis and autonomous delivery drones is set to be built in Coventry. Backed by the government, it is the biggest sign yet that policymakers are throwing their weight behind this high-tech transport solution.
Tesla’s slide deck for its earnings presentation on Wednesday featured images of a refreshed interior for its Model S. Engadget says the new cockpit is more in line with the Model Y and Model 3 and cockpit is the right word given the “aircraft flight deck” look for the steering wheel. There is also a larger display and a screen for passengers in the rear, showing off an entertainment system with 10 teraflops of power, according to Tesla. Deliveries of the revamped model are scheduled to start as soon as April.