Good afternoon, it is July 23rd 2020 and here is your economic and market update from BlackBee.
- Tesla reports $104m net profit
- Wirecard CEO re-arrested over alleged fraud beginning 2015
Tesla has reported a fourth-quarter profit in June of $104m, which pushes the market valuation far above any other car manufacturer. Investors had expected a slight loss however shares rose more than 4% in after-hours trading. Total reported revenue was $6.04bn, $1bn higher than forecasts and a modest 5% less than 1 year ago. This is a big achievement for Tesla considering the global pandemic caused factories to temporarily shut. Earnings per share soared past Wall Street predictions to $2.18 in comparison to the estimated $1.45 per share. The main US equity market S&P 500 can now consider Tesla for inclusion thanks to consecutive profit-making. While other car manufacturers were reporting losses of 25%, Tesla reported a 5% loss and confirmed delivery of 90,650 vehicles in quarter two, 16,000 more than forecast. Tesla says “fundamental operational improvements” were the strength behind the quarterly results, adding that efforts to reduce costs helped offset losses incurred by the Covid-19 pandemic.
Source financial times
The former chief executive of Wirecard Markus Braun has been arrested for a second time following the collapse of the German payments group. Prosecutors now believe accounting fraud began as early as 2015 when Mr Braun and others agreed to inflate Wirecard’s revenue to deceive investors. The investigation has intensified with the inclusion of other former executives and Wirecard’s former finance head, Burkhard Ley. The arrests mean four of Wirecard’s employees have been detained and Mr. Braun’s €5 million bail has been revoked. Officials have confirmed that German Minister of Finance Olaf Scholz was made aware of irregularities within the company almost a year and a half prior to the company collapse. Munich prosecutors have said in the last five years banks and other private investors put a sum of €3.2bn into Wirecard, funds which are now likely to be lost.
Best & Worst Performers of Large Cap US Stocks on Wednesday
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Global Market Update
(as at close of markets 22/07/2020)