Domain Daily: Snap Goes Snap

The Dose

  • Snap Earnings Disappoint

  • Elon's Call to Arms

  • Cybertruck Call


Wall Street Turns Its Back on Snap

More than a dozen Wall Street analysts cut their recommendations for Snap's stock after the social media company's latest earnings report.

The Point: We've seen this story playing out for months now. As the economy slows down, companies are cutting their ad budgets to save money. Unfortunately for social media companies, advertising is their bread and butter. Wall Street expected a dip in Snap's ad revenue, but the results were far worse than anticipated. As a result, Snap's shares fell by more than 30% on Friday, which catalyzed a sell-off among other social media stocks.  

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Elon Calls for a Lithium Refining Boom

The Tesla CEO said refining Lithium is "basically minting money" in an attempt to encourage more investment in the space.

The Point: Lithium is the primary component of electric vehicle batteries. And right now, EV demand is outstripping the supply of the metal. Of course, Musk knows this as well as anyone. The metal itself isn't all that scarce. Rather the bottleneck lies in finding companies that can refine it. Right now, the bulk of refining happens in China, according to Bloomberg. But, as we've seen throughout the last two years, depending on Chinese production presents its own set of challenges. So Musk is doing what he can to whip up further investment in the space. "You can't lose, it's a license to print money," he said during Tesla's latest earnings call.  

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Wells Fargo Analyst Calls Tesla's Cybertruck "Niche"

Colin Langan, an analyst at Wells Fargo, says investors shouldn't expect the Cybertruck to impact Tesla's revenue materially.  

The Point: Given that the Cybertruck has more than 600,000 reservations, Langan's call is a bit surprising. That said, reservations aren't iron-clad commitments, and Tesla is still a year away from selling the first production model. And, to be sure, he's comparing the importance of the Cybertruck to Ford's roll-out of the all-electric F-150. So perhaps Langan's assessment isn't as contrarian as it may seem at first blush. "I think the F-150 is more of a work truck, and Cybertruck buyers will be more using it for recreational-type purposes," the analyst told Yahoo Finance. "So it will be more of a niche market, at least initially."  

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*Domain Money Advisors, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission and an affiliate of Domain Money, has (as of this writing) the following assets mentioned in this communication as part of its managed portfolios: SNAP, TSLA