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Influential economist Peter Schiff predicted a crash for Bitcoin (CRYPTO: BTC) development company MicroStrategy Inc. (NASDAQ:MSTR), terming it the most overvalued stock in the MSCI World Index.

What Happened: In an X post on Tuesday, Schiff wrote, “$MSTR has got to be the most overvalued stock in the MSCI World Index. When it finally crashes, that’s gonna be the real bloodbath!”

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The MSCI World is a widely watched global stock market index that tracks the performance of about 1500 large and mid-cap companies from 23 developed nations. Added to the index earlier in March, MicroStrategy stock has a weightage of 0.039380% as of June 3, 2024 data.

The MSCI World Index gained nearly 24% in 2023, and so far in 2024, it has returned an average of 18.86%. The MicroStrategy stock has surged 220.64% year-to-date.

The stock’s Relative Strength Index, or RSI, was just above 70 as of this writing, as per Trading View, suggesting overvaluation. Interestingly, Wells Fargo & Co. (NYSE:WFC), which is also part of the index, had a higher RSI of 76.13.

This prediction comes in the wake of Schiff’s earlier suggestion to MicroStrategy’s founder, Michael Saylor, to purchase the large quantity of Bitcoin that the U.S. government planned to sell. Schiff’s recommendation was made in jest, following the U.S. government’s decision to liquidate 69,370 BTC it had seized from the dark web marketplace, Silk Road.

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By Akash Sriram, Abhirup Roy

(Reuters) -Tesla CEO Elon Musk said he expects vehicle sales to grow 20% to 30% next year, reassuring investors the company was improving its core business of selling electric vehicles profitably, and reducing concerns about when it could produce a robotaxi.

The forecast, building on a target for “slight growth” in deliveries this year, pushed the company’s shares up 12% in post-market trading on Wednesday. This set up Tesla to add about $80 billion in stock market value.

A drop in the cost of making vehicles added comfort for investors who saw Musk focusing on boosting Tesla’s industry-leading margin, even as he talked about a future dominated by autonomous cars.

Tesla’s long-awaited unveiling of its robotaxi on Oct. 10 failed to impress investors.

“No EV company is even profitable,” Musk told analysts on a conference call on Wednesday. “And to the best of my knowledge, there was no EV division of any company, of any existing auto company that is profitable. So it is notable that Tesla is profitable despite a very challenging automotive environment.”

Shares of Tesla’s smaller EV rivals Rivian and Lucid both rose 2% after-hours.

Musk said Tesla would roll out driverless vehicles offering paid rides next year, after the company received regulatory approval in California and Texas.

He said adoption – and sales – of the company’s supervised autopilot software, known as Full Self-Driving, increased substantially after the robotaxi event. Tesla this month again offered FSD free for a month to its current customers, for the second time this year.

The company said in a statement earlier it remained focused on expanding its vehicle lineup, cutting costs and making critical investments in AI projects and production capacity, despite uncertain demand and rivals pulling back on EV investments.

“Preparations remain underway for our offering of new vehicles – including more affordable models – which we will begin launching in the first half of 2025,” it said.

‘SWEET SPOT’

Tesla’s third-quarter profit margin from vehicle sales, excluding regulatory credits, grew to 17.05% from 14.6% in the prior three-month period, according to Reuters calculations. Wall Street had expected 14.9%, according to 24 analysts polled by Visible Alpha.

But Tesla’s finance boss, Vaibhav Taneja, said it would be “challenging” to sustain these margins in the fourth quarter ending December.

The EV giant said that the labor and material costs of making vehicles, known as the cost of goods sold per vehicle, dropped to its lowest-ever level, about $35,100. Adjusted profit of 72 cents per share in the third quarter beat an average estimate of 58 cents.

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(Reuters) -Newmont, the world’s top gold producer, missed Wall Street expectations for third-quarter profit on Wednesday, as higher costs and lower production in Nevada took the shine away from a rise in total output.

Shares of the company fell 6.8% after the bell.

Newmont said that its costs rose due to planned maintenance at the Lihir project in Papua New Guinea — which it acquired following a $17 billion buyout of Newcrest — and higher expenditure for contract services across its portfolio.

All-in-sustaining-costs for gold, an industry metric reflecting total expenses, rose to $1,611 per ounce in the July-September quarter, from $1,426 per ounce a year ago.

The Denver, Colorado-based company’s attributable production at the Nevada Gold Mines declined by 19.3% to 242,000 ounces during the third quarter, compared to the year-ago quarter.

Newmont owns a non-operating minority stake in Nevada Gold Mines, along with rival Barrick Gold, whose third-quarter production fell short of Wall Street expectations earlier this month due to lower output at the Nevada mines.

However, the company’s total gold production rose 29.2% to 1.67 million ounces, primarily due to higher production at the Cerro Negro mine in Argentina, where production had suffered earlier due to the death of two workers.

The market had estimated the miner to produce about 1.64 million ounces of gold during the reported period.

Newmont also said it expects to produce 1.8 million gold ounces in the fourth quarter, its highest output of the year, and remained on track to reach its target of receiving $2 billion from divestment proceedings.

The company posted adjusted profit of 81 cents per share, compared to analysts’ expectations of 86 cents per share, according to data compiled by LSEG.

(Reporting by Vallari Srivastava and Sourasis Bose in Bengaluru; editing by Alan Barona)

By Arsheeya Bajwa

(Reuters) -International Business Machines (IBM)missed analysts’ estimates for third-quarter revenue on Wednesday, hurt by weakness in its consulting segment as businesses cut back on discretionary expenses, coupled with declines in the infrastructure business.

IBM’s shares fell about 4% in extended trading after rising more than 40% this year, as investors bet on the company’s potential to benefit from generative AI through its software and consulting services.

An uncertain macroeconomic backdrop has prompted businesses to prioritize expenses on long-term consulting projects centered around AI, impacting IBM’s sales from shorter-term deals.

“A pause in discretionary spending is impacting our consulting business,” CEO Arvind Krishna said during a post-earnings call.

Revenue grew about 1% to $14.97 billion, missing estimates of $15.07 billion, according to data compiled by LSEG. Revenue from consulting was relatively flat in the third quarter.

The company’s AI Book of Business — a combination of bookings and actual sales across various products — grew to $3 billion, up $1 billion from the second quarter.

“Many clients are looking at how to free up cost and productivity to go invest in GenAI,” Chief Financial Officer James Kavanaugh told Reuters.

The book was driven by consulting, constituted of one-fifth software and four-fifths consulting in the third quarter. However, this growth is not yet reflected in the overall consulting segment.

“Client budgets are not expanding and AI consulting, rather than being additive, is cannibalizing other engagements,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.

Conversely, IBM’s software segment recorded its biggest jump in quarterly revenue in three years, as enterprises expand cloud infrastructure to accommodate genAI tech.

Software growth has helped drive profit of $2.30 per share for the third quarter, beating analysts’ average estimate of $2.23 per share, according to data compiled by LSEG.

The company’s infrastructure segment, which houses IBM’s mainframe, saw revenue decline 7% as the business is at the end of a three-year product cycle, when sales cyclically slump.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Alan Barona)

(Bloomberg) — Tesla Inc. surpassed Wall Street estimates for earnings in the third quarter and projected a slight increase in deliveries for the current year, reflecting a rebound in demand for its electric vehicles.

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The company on Wednesday reported adjusted earnings of 72 cents per share for the quarter, above the average analyst estimate and snapping four consecutive quarters in which the measure missed expectations. It reiterated plans to start production of more affordable models in the first half of 2025, saying it projects 50% growth next year over its 2023 production volumes.

Shares of the company soared as much as 12% in postmarket trading Wednesday after closing regular trading down 14% for the year.

Tesla said it expects another strong quarter of deliveries after a record third quarter, anticipating higher volumes for the full year. It won’t be easy, given the slowdown in deliveries Tesla posted in the first half of the year, and the carmaker will need to significantly increase sales in the fourth quarter to surpass — or even match — 2023’s level.

Chief Executive Officer Elon Musk said he expects to see continued growth next year, providing a “rough estimate” of delivery volumes. “I think it’s 20% to 30% vehicle growth next year, notwithstanding negative external events,” he said on a conference call with analysts.

Tesla said its Cybertruck, which it first delivered late last year, has reached profitability for the first time, thanks in part to increases in production for the futuristic pick-up truck. The company’s third-quarter automotive gross margin, excluding regulatory credits, was 17.1%, up from the previous quarter, when it was 14.6%.

Seth Goldstein, an analyst with Morningstar, said Tesla is benefiting from higher volumes and more stable prices. “Prices are stabilizing and unit costs are coming down,” he said in an interview.

Low Expectations

Garrett Nelson, an analyst with CFRA Research, said investors had a low bar for this quarter and questioned whether Tesla can sustain that level of profitability.

“Expectations were low heading into the release after four consecutive bottom-line misses and a Robotaxi Day that left investors with more questions than answers” Nelson said in a research note to clients.

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