Morning Market Feed, May 17th
It was “the day after” the somewhat upbeat CPI report and we got economic data to see if we could continue the run in the indices started. We also have a rumor that lululemon is buying its Mexican franchise stores and Tesla is desperate for shareholder votes. Let’s dive straight into it.
Economic data of the day
Let’s start of with the data coming from the market. We saw jobless claims coming in slightly above the expactiations at 222K vs 220K expected. A very slight decrease from last week. Continuing jobless claims also came in slightly above expectations at 1.794 million vs 1.780 expected. This was the lowest in a few weeks.
We did see the indices initially ticking up yesterday but going into the afternoon session, they had to give them up.
lululemon is buying their Mexican franchise stores, or are they?
lululemon is said to acquire their Mexican franchisee. This has not been officially confirmed by the company but an article by MT Newswire says it believes they got the information from a reliable source. So why would lululemon do this?
The Mexican franchisee operates 15 stores and as lululemon is seeing strong momentum in international markets, it seeks ways to offset lacking momentum in their US store base. Numbers were not specified, you can find the source here but the stock is down on the rumor by about 2.5%.
Tesla desperately seeking support
In an attempt to reinstate the 55 billion dollar paypackage that was voided by a judge as it wasn’t given to Musk by an independent board of directors, Tesla now want to have shareholders vote for it still pay musk for the already earned share packages. The company even went as far as hiring a legal firm and a strategic advisor, who set up a separate website where the director of the board explained the importance of the pay package in a video.
So what now?
Tesla is trying to get the retail investor community to vote in favor of the package, which will be difficult in light of the recent stock declines. The largest individual investor, who owns about 0.8% of the company, has already said to vote against the pay package.
So what is the stance of Tesla’s board in this matter? They think it is crucial for investors to vote in favor of the pay package. Even if it’s an advisory vote, I think investors wouldn’t be so charmed to see the board push it without consent.
Elon Musk has also said that he wouldn’t push for AI within Tesla if he doesn’t get 25% of voting shares. Note that this is different from the 25% equity share of the company that is said in the article I have as a source. But maybe Musk shouldn’t have sold as many billions of shares in order to buy Twitter.
That was it for today. Let’s see what the market brings and I will report on it next monday.
