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Wall Street lost ground. Roblox shot more than 40 percent higher after smashing results. Tesla is firmly on the brakes. General Electric splits itself into three.
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The US stock markets retreated for a while after the record rally in recent weeks. The Dow Jones lost 0.3 percent.
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Bloomberg says the Nasdaq100, the index with the largest 100 and most traded stocks on the Nasdaq, is showing serious signs of overheating.
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The benchmark for which giants like Apple
, Amazon.com
at Microsoft
rose 10 percent in the past month and saw its Relative Strength Index (RSI) climb to 78. That’s a long way into what’s called the sell zone (above 70).
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Traders are seeing a signal that a pullback is imminent because of excessive buying behaviour. In four of the previous five times the index has reached such a level, the Nasdaq 100 has subsequently lost 12 percent or more. The index lost 0.7 percent on Tuesday.
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Tesla
On Saturday, Musk launched a remarkable proposal on Twitter that he would sell 10 percent of his stake in Tesla. He got his 62.7 million followers on Twitter to vote on it. Nearly 58 percent thought it was a good idea. The possible sale of a large package of Tesla shares is causing nervousness, especially given the sky-high valuation at which the stock is trading.
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Kimbal Musk, the CEO’s brother, sold 88,500 shares a day before the poll on Twitter at an average price of $1,229.91. That brought him $109 million.
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Roblox
The star at the fair was the wildly popular gaming platform Roblox – especially among children – on Tuesday
. The stock shot up more than 40 percent to a record high of $109.52. The company delivered much better than expected results.
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Revenue doubled to $509.3 million, partly due to continued strong demand for popular games such as MeepCity and Adopt Me. At first, investors were a bit uncertain about turnover because a setback was expected due to the reopening of the economy. That this was not the case in the third quarter was shown by the number of hours that users were active: 11.2 billion. That is 28 percent more than a year earlier and more than 15 percent more than in the second quarter.
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Net loss rose from $48.6 million to $74 million. The number of employees increased by 66 percent to 1,435. “We are very pleased that in the third quarter, players of all ages and from around the world spent more than 11 billion hours on Roblox,” said CEO David Baszucki.
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General Electric
The American concern General Electric
represents a major metamorphosis. It’s alright divide oneself into three pieces: GE Aviation, GE Healthcare and a third company combining GE Renewable Energy, GE Power and GE Digital.
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The intention is to split off the health business first in early 2023, with GE retaining a 19.9 percent stake. The energy branch follows a year later. The ‘spin-off’ will always be ‘tax-free’, says GE.
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According to the group, the three independent companies will be better positioned to deliver long-term growth and create value for customers, investors and employees. The split will be the end of one of the oldest conglomerates in the world.
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The stock rose 2.7 percent.
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