LinkedIn and Twitter Get De-Friended
It was a bad week for social media stocks. On Tuesday, Twitter’s (TWTR) lower than expected revenue and user growth figures were leaked around 3pm, before the official earnings announcement was set to take place after the market closed. That sent the stock down 18% faster than it takes to say “unfollow.”
Adding salt to the wound? The earnings leak was published on Twitter. Ouch.
The news wasn’t much better for LinkedIn (LNKD). LinkedIn is trading down 20% this morning after it disappointed investors with its earnings report last night. The good news is first quarter performance (what got reported last night) was solid. The bad news is LinkedIn adjusted its second quarter forecasts down significantly from what Wall Street expected. Investors didn’t like the loss of confidence by the company and slammed the stock.
The U.S. Economy Looks Mixed
It seems Americans are feeling pretty good these days. Consumer sentiment in April was at its second highest level since 2007, and was higher than the average level during the last five months than anytime since May 2004.
[TDT Note: Consumer Sentiment is a survey conducted by the University of Michigan monthly that measures consumer’s attitudes toward their personal financial health, the health of the economy right now, and optimism for longer term economic growth. It’s used as an indicator of economic health, partially because it’s assumed that consumers who are more optimistic will spend more.]
The issue is, consumers might be the only ones feeling that optimism. According to a different economic statistic, manufacturing in April stayed at its weakest pace in almost two years. Even worse, U.S. factory employment decreased to the weakest level since September 2009.
Factories aren’t hiring as much as they wait for strong demand in the U.S., and especially abroad. The strengthening dollar has actually been hurting manufacturing in the U.S., as it means foreign companies with weaker currencies are less able to buy American products.
It’s an interesting time, as lower oil prices and the stronger dollar have meant good things for individual consumers (hello cheaper gas and affordable European vacation), but bad things for manufacturing businesses (a lack of foreign demand for their products).
Elon Musk has found his next adventure. Tesla (TSLA) is now making home batteries that can store energy and act like a generator. That means power blackouts are NBD. The new product is called the Powerwall and it looks as cool as you’d expect from Tesla:
The downside is these batteries don’t come cheap. A 7-kWh unit will retail for $3,000, while a 10-kWh will set you back $3,500. Then it needs to be installed. They’re cheaper than many generators, but still way out of the price range for a typical American.
In typical Tesla fashion, they’re pretty confident. The company is full-on hiring for the business and telling applicants that the unit will be “a multi-billion dollar per year one in the near term.”
Interesting Article of the Week:
Wishing you had a little more Buffett in your life? Turns out he’s all around you.