Microsoft's (MSFT) Aiming High
RealMoney Contributor Stephen Guilfoyle reported one sector where we saw some major selling pressure yesterday was in Information Technology. Selling continued across the semiconductor space, which is highly exposed to China for revenue. However, the selling was just as intense for the cloud/software space, an industry almost entirely not exposed to China, but perhaps just as exposed to the ruthless magic of passive investment.
Depending on your source, the technology sector trades at a higher valuation than does the broader marketplace, at somewhere between 18.7 times and 19 times next year's earnings. Sliced and diced, one quickly sees the semis, and their suppliers trading around 10 to 13 times, while our beloved cloud names sport valuations in the 20's and even 30's. This is where the perceived overvaluation is. This is where the largest profits are, this is where the money has to come from for those getting skittish ahead of any feared slowdown in growth.
The biggest questions are obviously, what does this mean for Tesla's stock and its CEO. For better or for worse, the latter is a big driver of the former.
Not only does Elon Musk own more than 20% of Tesla stock, but he is also the hype machine that's gotten Tesla to where it is today. While he's been outlandish on Twitter over the past few months, there's possibly no other co-founder CEO that could do what Musk has done to get Tesla to where it is today.
That said, it may all topple over, thanks to him as well.
Tesla is apparently under DOJ investigation for public statements made by the company and Musk. If that ends badly for Musk—say, being forced from the C-suite—who will lead Tesla? How could shareholders feel as confident in the company without its knight in shining armor?
No matter who Tesla would bring in to replace Musk as CEO, they couldn't fill those shoes.
Gabe Hoffman, general partner at Accipiter Capital Management and Tesla bear, has been saying Musk will be out as CEO ever since the CEO's infamous go-private tweet. "I said this 15 minutes after Tesla resumed trading on August 7th," Hoffman told TheStreet.
He's stuck to that outlook since too, telling us earlier this month that, "the official reason provided, and the exact timing, are irrelevant in perspective to the impact upon Tesla's stock price. Once Musk is gone, 'the cult of Elon' will be finished, in the greatest cult stock of all time."
The question now becomes, what will happen to Tesla's share price? Bears are clearly reveling in Tuesday's news, and with Tesla stock down less than 5%, bulls don't seem to be taking it as bad as one would think. Perhaps investors are still weighing what this means for the stock. Maybe they're unsure of what the consequences of the investigation will yield. After all, a slap on the wrist with a fine or other light punishment will likely be a sigh of relief for investors. Bears are obviously hoping for much more than that.
"Elon Musk committed the most obvious and public securities fraud I have ever seen in my 18 years as a hedge fund manager," Hoffman added. "No CEO of any public company has ever remained in their job, once charged with securities fraud. Elon Musk will be out as Tesla CEO."
Most Unusual Dog Breeds
Yeah, you read that right.
The American Kennel Club recognizes 190 dog breeds, with the family-friendly Labrador retriever ever-present at the top of their most-popular list, along with German Shepherd dogs and golden retrievers. But though humans have been breeding dogs for thousands of years, usually for precise purposes, many breeds have nearly become extinct or grown significantly less popular through time.
Though everyone loves a Lab, we like to root for the underdog, too. Here are some of the least common dog breeds, according to the AKC's ranking.
There are some weird dog breeds on this list. Have you ever heard of the Otterhound? Me either. What about the Bergamasco? If these don't sound familiar, check out these piece.