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Today's big stories

Citigroup and Morgan Stanley changed their minds about Tesla’s stock
A giant hedge fund is taking on crypto after the crisis, and its strategies could help you get stuck in from home – Read Now
Credit Suisse sounded the alarm bells and started gearing up for another loss this quarter.

The Price Is Right

What’s Going On Here?

Analysts at Citigroup and Morgan Stanley decided on Wednesday that Tesla’s shares are a decent deal all of a sudden.

What Does This Mean?

Investment banks don’t just deal in assets and cash: they also deal in recommendations. See, one of the services these institutions provide pro clients is expert advice on the “fair value” of shares. And to work that out, they get their in-house eggheads to do some deep-dive research, crunch the numbers, and settle on a value that they can compare with the firm’s actual share price. Then they advise clients to buy, sell, or hold the company’s shares depending on the gap between the two. Now Tesla’s slipping share price has prompted Citigroup and Morgan Stanley to change their minds: Citi thinks the stock’s a hold, and Morgan Stanley, a buy.

Why Should I Care?

For you personally: Bucking the trend.
It’s against the rules, but leaned-on analysts can win their firms extra business, like juicy corporate advisory fees, by giving their stock price opinions some added va-va-voom. Stock prices tend to go up too, which means that a rare and often brave “sell” recommendation sticks out like a sore thumb, and is usually backed up by some well-founded opinions. So sure, Citigroup’s view on Tesla has only changed from hate to ambivalence, but a pivot in its gutsy opinion is worth clocking at the very least.

The bigger picture: A price for everything.
Good companies can be bad stocks, and bad companies can be good stocks. It sounds like a riddle, but Tesla can help us unravel how this conundrum plays out. See, most analysts do think Tesla’s a strong company, corporate culture aside – but some doubted whether the firm’s as entirely herculean as its stock price implies. The opposite can be true too, of course: even the most flawed firms can be diamond stocks if the price is low enough.

You might also like: How to work out what Tesla’s really worth.

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Analyst Take

Why This Giant Hedge Fund’s Planting Seeds In The Deserted Crypto Scene

By Jonathan Hobbs, Analyst

Investors are fleeing the disaster-struck crypto world as fast as they can.

But that hasn’t stopped one calculating hedge fund from wading straight in: Man Group – the world’s biggest publicly-traded hedge fund firm – is about to launch a brand-new crypto fund.

Man Group’s keeping its crypto cards close to its chest, so I’ve taken a closer look at the “investors’ guide to crypto” report it published in November.

I’ve worked to figure out how – and why – the hedge fund giant might be trading crypto, and how you could alter the expert strategies to give your portfolio an edge too.

So that’s today’s Insight: why Man Group is taking crypto on after the crisis, and how you can follow along.

Read or listen to the Insight here

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