Finimize - 🪫 Tesla’s out of battery

Hi Reader, here's what you need to know for January 4th in 3:11 minutes.

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Today's big stories

Tesla’s quarterly deliveries hit a new record, but still came in below expectations
Here are the three big questions you’ll face this year – Read Now
The TV content spending boom might be on its last legs

New Year, Same Musk

What’s Going On Here?

Tesla announced over the weekend that it stalled last quarter, meaning Musk might have to go back to the drawing board this year.

What Does This Mean?

The control panels in Tesla HQ were probably flashing red as 2022 drew to a close – including the critical “Demand” meter, whose needle seemed to have slipped pretty far into the red zone. That drop could be why the firm took the unusual move of offering bumper incentives in its two biggest markets, the US and China, but it seems that was too little, too late. Sure, deliveries swelled 11% from the previous quarter to hit a record high of over 405,000, but they still fell short of the 421,000 analysts were expecting. That brought 2022’s deliveries 40% above the previous year’s – a far cry from the 50% average annual growth rate the company’s been crowing about.

Why Should I Care?

Zooming in: Build it and they won’t come.
There’s never a good time for demand to slip, but you certainly don’t want it to happen shortly after opening two new plants. That extra factory space helped Tesla ramp up production, meaning it's now made more cars than it's delivered for three straight quarters. But over-manufacturing is hardly a sustainable business model in the current economy, and analysts reckon the company has two options: cut growth targets or double-down on price cuts – and neither prospect will appeal to the EV giant or its investors right now.

For markets: Down but not out.
Tesla’s current trajectory – paired with Musk’s distracted Twitter antics – might explain why the EV manufacturer’s stock plunged nearly 40% in December alone. The firm even notched its worst daily drop since 2020 on Tuesday after the dismal deliveries news. Still, investors have far from abandoned the titan. After all, even after the drop, its price-to-earnings ratio – a key valuation metric – is still around five times that of rivals GM and Ford, reflecting the much greater speed that Tesla’s expected to grow at.

You might also like: Why Tesla’s stock might actually be a little too low at this price.

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Analyst Take

Goldman’s Got Three Really Big Questions For Investors

By Luke Suddards, Analyst

Goldman Sachs’ top-notch US economics team has come up with the ten most important questions facing investors this year.

But they include some pretty in-the-weeds stuff.

So I’ve plucked out what I think are the three most important questions – and their answers – to give you an idea of what to expect in 2023.

That’s today’s Insight: the three burning questions facing investors this year.

Read or listen to the Insight here

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The Show Might Not Go On

What’s Going On Here?

Analysts predicted this week that the era of speedy growth in TV content spending has already had its finale.

What Does This Mean?

So long, holiday binge-watching: it looks like your favorite streaming platforms and channels could start paring back the cash they’re splashing on lavish TV spectacles. That move would dramatically reverse the trend of the last ten years, when spending on original content almost doubled. But streaming companies are feeling the burn of economic slowdowns, especially in the form of slowing subscriber growth and towering losses. That’s why research group Ampere Analysis thinks that spending will grow just 8% across platforms like Netflix, Disney, and HBO – a whopper climbdown from 2022’s colossal 25% growth. And things are even worse in the already flailing world of traditional TV: there, rising costs and an advertising downturn could see old-school broadcasters cut spending by 3%.

Why Should I Care?

Zooming in: Netflix’s thrifty and thriving.
Make no mistake, Netflix is still the top dog in the streaming space. The colossus is keeping a closer eye on its wallet this year, sure, but the firm’s already getting more bang for its buck than its rivals. In fact, Morgan Stanley reckons that media companies like Disney and Paramount will spend twice as much on content per subscriber than young buck Netflix this year, with lower revenue from each subscriber to boot. Stats like that suggest that 2023 could be about to bring legacy media companies yet another bruising.

The bigger picture: Go big or go home.
Streaming platforms are doing everything in their power to stem the bleeding right now, hiking prices and slashing costs like there’s no tomorrow. But stunts like that only work for so long, and if the firms fail to turn a profit sooner or later, they’ll either have to quit altogether or – more likely – seek strength in numbers, even if that means teaming up with rivals.

You might also like: Work out what streaming giants’ stocks are really worth.

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💬 Quote of the day

“It has been my experience that folks who have no vices have very few virtues.”

– Abraham Lincoln (the 16th president of the United States)

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🥳 Coming Up In The Next Week…

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🌪 Preparing Your Strategy For A Volatile 2023 and Beyond: 12pm, January 11th
🤑 Wealth Building Habits With Carl Richards And Helena Wardle: 5pm, January 11th
🙋‍♀️ Ladies Investing Club: 6.30pm, January 11th

👀 And After That…

🎙 Live Q&A With Finimize CEO Max Rofagha: 1pm, January 12th
👩‍💻 2023 Investing Opportunities For The Self-Employed: 10am, January 13th
🌍 Investing 101: Where To Invest In 2023: 1pm, January 16th
💥 How To Spot The Best Long-Term Investments: 1pm, January 17th
📈 How To Hedge Against Volatility With Crypto: 5pm, January 19th
📑 The Risks And Regulations When Investing In Crypto: 10am, January 27th

🎯 On Our Radar

Glass half full. British boozers aren’t letting the cost-of-living crisis spoil their fun.
Dry your eyes, mate. After crying for 1,000 days in a row, one man decided enough was enough.
Sayonara, Tokyo. Japanese families can rake in cash by leaving the megacity behind.
Out-dated. Spending a whole year single can teach you a lot.
Pay attention. Maybe the internet really is sapping our ability to concentrate.

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