3% Treasury Bond yields aside calls for a double dip recession seem premature as personal incomes and expenditures continue to post progress in May and supportive of modest economic growth. Inflation remains in check as well.
A few of our new holdings are moving well this morning on little or no news.
Telecom service company IDT Corp. is up 7% on potentially being added to the Russell index.
For green car advocates Tesla Motors is due to stage its IPO tomorrow and markets the biggest auto IPO since Ford Motors over 50 years ago. At minimum the Tesla IPO and subsequent stock performance will be an intriguing barometer of investors interest and belief in the future of Green autos and could bode well for future green auto starts ups: Fisker and Smith Electric Vehicles.
The Tesla story is intriguing but intriguing is not enough of a reason to devote capital to at this point. The Tesla battery operated sports car is very beautiful. If you haven’t seen the car you should. It reminds me of a Porsche in shape with a targa convertible top. Price is in the $50K range and they’ve sold just over 1000 vehicles. But the company is bleeding cash with a loss of $29 million in the 1Q.
Toyota has invested $50 million into Tesla but at this point in time the company is supported by a $465 million staged loan from the Department of Energy.
If that’s no enough Tesla CEO Elon Musk will be selling $20 million dollars of his own shares in the company. Lack of revenue and earnings would eliminate it from our consideration but it will be fascinating to watch nonetheless.
Long IDT
BP