Tesla vs. Meta: Who will reign supreme?

Giles Coghlan LLB, Lth, MA Financial Source

Battle of the titans

Last week a very bizarre headline broke that Elon Musk and Mark Zuckerberg were preparing to fight each other in a cage fighting match. Elon Musk is never one to break away from a challenge and he does hold the weight advantage, but Mark Zuckerberg is said to be quite handy in the ring with some experience under his belt. Whether this fight actually goes ahead or whether it is just a bit of fun between the two men remains to be seen. However, according to CNBC, the match could bring in over $1 billion in revenue. Although market sentiment can be impacted by magazine covers, the impact of a cage-fighting match on Twitter’s, Tesla’s, or Meta’s share prices is far less obvious.

Would Meta win if it fought Tesla?

An interesting piece by Reuters theoretically pitched the two companies that Musk and Zuckerberg lead against each other. The view from this Reuters piece is that Tesla would win in a fight against Meta. The piece noted that Tesla’s revenue is fast catching up with Meta’s.

Tesla has also performed significantly better, with a dollar invested in Tesla’s stock-market debut in 2012 now worth $144, compared to $7.45 for Meta. Tesla has a market capitalisation of around $800 billion which is around $100 billion more than Meta’s.

While Meta has a stronger financial position with a larger cash reserve ($37 billion), Zuckerberg has also generated more cumulative free cash flow ($116 billion) and returned a significant amount ($96 billion) to shareholders through buybacks. Tesla’s future, however, is presented as more promising with plans for charging networks and battery production set to capitalise on a green world. These plans have already received US Government support too. So, is Tesla really going to be the winner between the two companies, or can Meta find a way to fight back?

In conclusion, the cage fight between Elon Musk and Mark Zuckerberg is unlikely to impact the share prices of Tesla, Twitter, or Meta. However, if the fight goes ahead we could see volatility in those share prices if there is a risk of any serious injury. Aside from that risk, the main battle between the two companies is likely to take place in the financial arena rather than the MMA ring.

Learn more about HYCM

Author

Giles Coghlan LLB, Lth, MA

Financial Source

Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

Bitcoin price extends losses, and trades below the lower consolidating boundary at $67,300 at the time of writing. A firm close below this level could trigger a deeper correction for BTC. Despite the weakness in price action, institutional demand shows signs of support, recording mild inflows in ETFs so far this week.