Tesla CEO Elon Musk said Friday he is terminating his Twitter purchase agreement. Meanwhile, Tesla said it may open up its supercharger network to all electric vehicles in the U.S. by the end of 2022, according to a White House memo. Tesla stock rose.
In a filing with the Securities and Exchange Commission late Friday, Musk said he was pulling out of the deal because of a material breach of multiple provisions of the agreement. Musk has been saying for weeks that Twitter appears to have misled him about the number of fake accounts and spam-bot issues.
Wedbush analyst Dan Ives said in a note to clients Friday that investors can expect a lengthy court battle as Twitter tries to salvage the deal or collect a $1 billion breakup fee.
Tesla stock appears to have reacted positively to the news, as investors have long considered the $44 billion Twitter deal a "head scratcher," Ives said.
Tesla Supercharger Network To Open To Others
The June 28 White House memo said Tesla is making investments at its factory in Buffalo, N.Y., to support the deployment of new fast-charging stations to add to its fast-charging network.
The Supercharger stations are capable of charging vehicles up to 250 kW. The White House said Tesla is expanding production capacity of power electronics components that convert alternating current to direct current, charging cabinets, posts and cables.
"Later this year, Tesla will begin production of new Supercharger equipment that will enable non-Tesla EV drivers in North America to use Tesla Superchargers," the statement said.
Tesla already allows other EVs to use its Superchargers in Europe, where it has a network of 800 Supercharging stations across 30 countries. Tesla's Superchargers are open to others in some cities in Norway, Austria, Belgium, Denmark, Finland, France, Germany, Luxembourg, the Netherlands, Spain, Sweden, Switzerland and the U.K.
Tesla has the world's largest fast-charging network. The most recent data available from the company shows that it has around 35,000 stalls and 4,000 stations worldwide. Half of them are in China and Europe, while the U.S. remains its single largest market.
Opening up the Supercharger network can bring in more revenue from Tesla. But it also could make potential EV buyers more willing to buy a non-Tesla vehicle.
Meanwhile, the China Passenger Car Association reported that Tesla sold 78,906 made-in-China vehicles in June. That included 968 for export. China-made vehicle sales rebounded in June after Covid shutdowns hampered production in April and May. But Q2 shipments from Tesla's Shanghai plant were still down around 38% from the first quarter.
Tesla Stock
Shares gained 2.5% to 752.29 on the stock market today. It gained another 2.6% after-hours after Musk said he had pulled out of his deal to buy Twitter.
Tesla stock popped back above its 50-day line for the first time in two months, according to MarketSmith chart analysis.
The EV maker's stock is 40% off its 52-week high of 1,243.49. Its relative strength line is ticking back up. Tesla's RS Rating is 44 out of best-possible 99. Its EPS Rating is 80.
Tesla reports second-quarter earnings on July 20. Analysts polled by FactSet expect earnings of $1.90 a share, up 31% year over year. They see sales increasing almost 40% from the year-ago quarter to $16.666 billion. Both would be down significantly vs. Q1.
Among other U.S.-based EV makers, Rivian rose 1.1% and Lucid gained 1%. Other American automakers with a growing slate of EVs also edged lower. General Motors slipped 1%, and Ford inched lower 0.3%.
Among China-based rivals, BYD fell 2.9%, back in buy range. Li Auto was down 1%, holding in the buy zone. Nio was up 0.6% and Xpeng lost 1%, both consolidating below their 200-day lines.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
