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Companies

Tesla Stock: Investing in the Future

 4 min read / 

The recent performance of Tesla stock suggests that shares in the Silicon Valley company will continue to rise as the market rewards its innovation.

With global warming, fossil fuels and pollution at the centre of many debates, investors are increasingly interested in Elon Musk, who seems to be an entrepreneur with all the answers.

Musk dominates the industry not only due to his visionary ideas, but also because he has created one of the most important brands in the world, which further reinforces its position at the top. Tesla is ranked third, after Apple and Google, in the world’s Top 50 Most Innovative Companies. Consequently, Tesla enjoys near-monopoly status, although rivals are attempting to compete with the company.

Overpriced?

As this chart shows, Tesla already has the fourth largest capitalisation in the world. Elon Musk has revolutionised thinking about the future and in doing so created a company, which in just 10 years has reached a capitalisation equal to Ford Motors.

However, it should be noted that Tesla is a loss-making company and posted a loss of $397 million last year. Some economists think it is a financial bubble, citing the fact that although Ford and Tesla have equal capitalization, the former produced 76 million cars in 2016 while Tesla produced only 84,000, indicating that sales did not justify the exponential rise in share value. Perhaps the market is rewarding the brand and its innovative ideas. On the flipside, if the market loses confidence in Musk there could be dire consequences.

Tesla’s Energy Storage

In addition to these projects, others are equally striking. Examples include the Uber bus, and providing energy for entire cities through renewable energy. This last project was realised on Kauai Island, Hawaii where using 55,000 panels, they are providing the energy needed overnight with the largest storage system ever built. The next challenge is to increase energy storage capacity worldwide.

 

 

According to Bloomberg, Tesla has launched 5 different projects in the Pacific on Ta’u in American Samoa, Monolo Island in Fiji, and Kauai and Oahu islands in Hawaii.

Lyndon Rive, president for global sales and service at Tesla’s energy division, recently said it makes perfect sense to convert every island to a solar storage facility. Indeed, island micro-grids currently represent 36 percent of Tesla’s total power storage capacity.

In 2016, a total of 157 megawatt-hours of energy storage capacity has been installed and a further 17 megawatt-hours in the first quarter of 2017.

The Donald

Despite professing his support for fossil fuels, Trump is aware that sooner or later they will be replaced by renewable energy.

As a businessman, he will surely not try to interrupt a process that is already happening. However, he will probably ignore the Paris deal as he seeks to stimulate the American economy and prioritise energy jobs over environmental concerns. The US has invested heavily in oil reserves and the increase in renewable energy could cause billions of losses for the nation.

From an economic point of view, Trump will try to milk the economic benefit of these resources before they lose their value as the energy revolution takes place. He wants to remove regulation and bureaucracy so as to reduce energy costs. In addition, environmental constraints and climate policies that are seen as slowing the economy will be removed as he seeks to engage in energy policies that cut costs and boost energy security. The Environmental Protection Agency will be refocused on the core mission of protecting air and water.

Above all, Trump has set the goal of achieving energy self-sufficiency and no longer depending on OPEC or hostile nations.

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Asia

Google to Open Artificial Intelligence Centre in China

 2 min read / 

Google AI China

Google will be opening its first artificial intelligence (AI) research centre in China, despite many of its services being blocked there.

Fei-Fei Li, Chief Scientist of Google Cloud, said:

“I believe AI and its benefits have no borders. Whether a breakthrough occurs in Silicon Valley, Beijing or anywhere else, it has the potential to make everyone’s life better for the entire world. As an AI first company, this is an important part of our collective mission. And we want to work with the best AI talent, wherever that talent is, to achieve it.”

The research centre will focus on basic AI research, and will consist of a team in Beijing, who will be supported by Google China’s engineering teams.

Google’s search engine and its Gmail are banned in China. However, the country has 730 million internet users, making the market too large to ignore.

Google is not the only tech giant facing restrictions in China. Facebook is also banned, while Apple’ App Store has been subject to censorship. In order to comply with government requests, Apple removed many popular messaging and virtual private network (VPN) apps from its App Store in China earlier on this year.

China has recently announced plans to develop artificial intelligence, and wants to catch up with the US. However, human rights groups are concerned by China’s use of artificial intelligence to monitor its own citizens.

Keep reading |  2 min read

Companies

A Deal Looks Likely for Disney’s Fox Takeover

 2 min read / 

Disney's Fox Takeover

The Story

Disney is on the cusp of confirming a deal to buy most of 21st Century Fox in a $60bn deal, reports claim. The sale would see Disney acquire 20th Century Fox film studios as well as Sky and Star satellite broadcasts in the UK, Asia and Europe, according to the BBC.

21st Century Fox would retain broadcasting network Fox News and Fox Sports 1. While both would remain independent initially, they “could consider a merger later with the Murdochs’ publishing company, News Corp.,” reported Bloomberg’s David Hellier and Anousha Sakoui.

Fox CEO James Murdoch could potentially be offered a senior position at Disney once the deal is done.

Why It’s Important

Fox has reassessed its place in the current media landscape and decided that to in order to be successful it would need to scale up. Disney has the scale that Fox lacks. By consolidating their efforts around news and sports, Fox will be able to play an important role in the media industry.

On the other hand, Disney’s acquisition will extend the company’s reach. Plans to roll out a new Disney streaming service could benefit from the increased international exposure, where there appears to be the most growth.

Disney would also acquire Fox’s streaming service Hulu, opening new opportunities for Disney to compete with the likes of Netflix and Amazon Prime Video.

Keep reading |  2 min read

Companies

ExxonMobil under Shareholder Pressure

ExxonMobil Shareholder

The world’s largest oil group has agreed to publish the impact of climate policies on its bottom line.

In recent years, shareholders of the world’s largest oil and gas conglomerates have been pushing companies to publish analysis of the threat they face from climate change and the threat of green policies. In a regulatory filing, Exxon announced that it would change how it reports its results to include a paper on how climate policies are hurting its business. The proposal was backed by around 60% of Exxon’s shareholders back in May, which was led by the New York state employees’ retirement fund. The move follows Exxon’s gradual shift towards addressing climate change; in the 90s, the group campaigned against the Kyoto protocol but has since committed to reducing emissions.

Keep reading |  1 min read

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