Tesla shareholders left in a spin, Deliveroo beats estimates, TUI remains resolute and Admiral sees profits drop

“Tesla shareholders may well be seething at Elon Musk’s latest share sale, no doubt arguing they didn’t sign up to such erratic behaviour. To be fair, they have every right to be furious,” says Danni Hewson, Financial Analyst at AJ Bell.

“Musk may argue it is better to have the readies at hand in case he needs to cough up for Twitter.

“If he were to lose the legal battle with Twitter and not have funds available to pay the bill, the market would assume he would then have to sell Tesla shares and the stock could plummet.

“However, whether he sold now or down the line, the whole episode is still very annoying to Tesla investors. Shareholder would expect the value of their investment to be influenced by sales of electric vehicles and battery storage systems, not the fortunes of an entirely separate company.

“You could argue that Musk might buy back the Tesla shares if he doesn’t have to shell out for Twitter, but whatever happens it is another black mark against the entrepreneur.”

Markets, Tui, Deliveroo and Admiral

“All eyes will be on US inflation data released later today as this could have a major influence on the direction of the stock market. A higher than expected figure could weigh on equities as investors have simply had enough of the rising cost of living.

“The FTSE 100 dipped 0.2% ahead of the news while pre-market indicative prices pointed to a flat opening from US stocks. This suggests investors don’t want to risk taking any new positions until they get the inflation news.

“Investors have become very nervous about tech stocks this year, for fear that high rates of growth may become harder to achieve. Cracks have been appearing in a range of areas, from online advertising to component shortages, affecting businesses and knocking them off course.

“It’s therefore a pleasant surprise to see Deliveroo beat estimates, as it looked to be a prime candidate to serve up bad news. After all, if consumers are under increasing financial pressure, cutting back on a takeaway meals is an easy win and that would feed through to lower activity for Deliveroo.

“If you dig deeper into its latest results, there are still reasons to be cautious, however. Growth has slowed in the past quarter and the principal reason it managed to beat estimates was by cutting back on marketing spend. That might explain why the share price didn’t rally on the news.

“With summer holidays in full flow, everyone who isn’t sitting on a beach is no doubt dreaming of dipping their feet in the sea and kicking back with a cocktail in the sun. It’s therefore understandable that TUI is confident about holiday demand for the rest of the summer. Nonetheless, it cannot brush over the fact that flight disruptions are still a major thorn in its side.

“A big drop in profits is unusual for Admiral but comes as no surprise if you’ve already seen recent warnings from fellow insurers Sabre and Direct Line. Claims inflation has caused significant headaches in the motor insurance industry, fueled by used car prices shooting up, higher repair costs, fixes taking longer to complete and wages going up.”

These articles are for information purposes only and are not a personal recommendation or advice.