Together with Shareholder Vote Exchange

Good morning investors! Yesterday was very hectic with news coming from every sector and investors catching up after a long break.

Today we cover:

• Jim Cramer sees a pullback.

• Elon isn't happy with Tesla.

• Introduction to private equity.

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📊 Economy and News 

Jim Cramer expects a pullback

CNBC’s Jim Cramer thinks it is time for stocks to retract because “some stocks have been seeing huge gains too quickly.”

“I am not a bear,” he added while explaining how some stocks “have gone parabolic, meaning they’re straight up, and they’re going straight up on nothing.”

Why? He believes that the possibility of a rate cut and upgrades from experts helped companies climb new highs but now that the Fed is not sure of a rate cut, stocks might start to pull back.

Not a crash: Cramer doesn’t see a market crash but he’s expecting some major stocks to fall, including big tech companies.

His advice: Cramer suggests investors to wait before buying as he sees not just tech but also healthcare stocks to come down.

Global hits:

• Spirit Airlines shares plunge after judge blocks JetBlue merger.

• Apple risks a hit to its sales after the Supreme Court declines to review Epic’s app store case.

• China’s economy grew by about 5.2% in 2023, Premier Li says.

Just in: Americans are pulling back on their spending, but debt remains top of mind.

📈 Stocks

S&P 500 4,765.98 (-0.37%)
DJIA 37,361.12 (-0.62%)
NASDAQ 16,830.71 (-0.013%)
BRENT CRUDE 77.81 (-0.61%)
* Prices as of Jan 17th, 12:20 AM UTC

It’s Musk V/S Tesla

Investors are concerned after Elon Musk warned that he will need greater control of Tesla if the company's AI ambitions are going to be met.

"I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned," Musk said from his X account on Monday night. "Unless that is the case, I would prefer to build products outside of Tesla."

He questions why large asset custodians such as Fidelity and BlackRock "never show up for work" despite owning large stakes in the company.

What does it mean? In simple words, Musk wants more power and, if he doesn’t get what he wants, he’ll build new tools outside of Tesla, making it harder for the company to achieve its goals.

Musk currently owns around 13% of Tesla stock after selling billions of dollars of shares in 2022 to help finance his $44 billion purchase of Twitter.

Tesla and AI: Tesla seems to be ambitious about AI and investors are also keen to know what the company has in store for them. It already uses its Dojo supercomputer to power its Full Self Driving (FSD) software and some upgrades are expected soon.

Analysts are of the view that AI could help Tesla generate a lot of money, just like AWS does for Amazon.

This is not good: Analysts and investors aren’t happy with Elon’s move.

They argue that it isn’t the right time for Musk to ask for additional compensation as the company is already facing stiff competition and profitability issues. Furthermore, there are legal challenges.

Tesla’s still dealing with a Delaware Chancery Court ruling on a shareholder lawsuit over Musk’s 2018 $55 billion performance award. The company cannot offer another compensation plan till the issue is settled.

Reminder: FedEx is building its own all-in-one e-commerce platform.

Sad: Boeing i down about 21% YTD after facing multiple challenges and some downgrades are expected.

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🔐 Crypto

Bitcoin $42,947 (-0.42%)
Ethereum $2,575 (-0.46%)
Total market cap $1.6t (-0.3%)
* Prices as of Jan 17th, 12:20 AM UTC

A look at crypto

Here’s what’s happening in the world of crypto:

• India blocks access to major offshore crypto exchanges.

• XRP price takes a sudden downturn, nearly invalidating the uptrend noted since last week.

• Grayscale Bitcoin ETF sees $579m in daily net outflows.

• Argentina President Javier Milei allows provinces to create local currencies.

• Analyst suggests Shiba Inu primed for a rally following spot Bitcoin ETF news.

• US ETF market heats up with Ethereum: what you need to know.

• Coinbase’s one-third revenue ‘at stake’ as SEC battle faces dismissal challenges.

💵 Personal Finance

Introduction to private equity

Different from private debt, private equity is for people with a lot of money as you typically need millions to invest in private equity but returns can be exponential. However, the risk factor is also there.

It refers to capital investment made into private companies with the hope that they’ll one day get big. You’re technically betting on the genius of another person.

The infographic below explains everything about private equity, including its subsets:

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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