The market continued to slide on the news of money laundering activities by some of the world’s largest banks. — More on that in the “Overall Market” section.
Beyond the overall market, one streaming stock is not an underdog anymore, and the blurry line between a story and the reality caught up with the market’s excitement about another stock. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, as always, Tesla is a better story than is a company. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
- U.S. markets: All three indices ended Monday in the red. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price continued to fluctuate between $10,000 & $11,000 as a large volume of Bitcoin options are about to expire on Friday.
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Despite some recovery towards the end of the day, all three indices had a bad start to the week. The market was impacted by the news that some of the world’s biggest banks could be involved in a global money laundering. If this becomes the spark that fuels a market crash, we can all blame banks once again for a global meltdown. We don’t know that would be the case, and the market can rally on some other news tomorrow. However, when big global banks get involved in illegal activities, it can crash the system.
No More An Underdog
So, what happened?
Shares of Roku (Ticker: ROKU) were up more than 17% on Monday. The company added NBC’s Peacock to its platform. The excitement is about the possibility of adding HBO Max and NBCUniversal’s advertisement inventory to Roku. What was once an underdog of the streaming war is now a market leader.
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Blurry Line Between Reality & Story
So, what happened?
Shares of Nikola (Ticker: NKLA) were down by more than 19% on Monday. After the fraud allegations by short-seller Hindenburg Research and an SEC investigation, the founder, Executive Chairman and board member of the company, Trevor Milton, resigned. The resignation seems to confirm the allegations. We just don’t know whether it is limited to Milton or the whole company is under investigation. This is the danger of SPACs. When you take a company without any product publicly and create a buzz with good stories, the line between reality and story gets blurry.
A Better Story Than A Company
So what happened?
Tesla (Ticker: TSLA) is the master of good stories. The company has its highly-anticipated Battery Day event on Tuesday. It is supposed to reveal many exciting things” as put by Elon Musk. However, Elon’s leaked internal email has shown that battery production in meaningful enough volumes that could close the gap in Tesla’s battery needs and what its suppliers can provide won’t be happening until 2022.
Tesla is a good company, judging by its success in leading the EV production market. Still, it’s a better story than a company judging by how much Elon can move the stock by telling daring and exciting stories.
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Disclosure: Authors of this Scoop own shares of Tesla (Ticker: TSLA).