—— Bezos Buys Third Florida Mansion; Tesla Deliveries Brutally Drops; Americans Turn to Cheaper Cars; UFC Parent Sold For $13bn; Worst Might Be Over For Apple Stock; BYD Loses EV Throne to Tesla; L.A. Apartment Rents Hit Record Highs
1. Bezos Buys Third Florida Mansion
Jeff Bezos, the founder of Amazon.com Inc., is expanding his real estate holdings by acquiring a third mansion on South Florida’s exclusive Indian Creek Island. Sources familiar with the matter revealed that Bezos agreed to purchase a six-bedroom home for approximately $90 million in an off-market deal. It’s reported that Bezos intends to reside in this new property while he demolishes the other houses he owns on the island.
With a net worth of $203.7 billion, Bezos ranks as the world’s second-richest person, according to the Bloomberg Billionaires Index. He announced his relocation from the Seattle region to Miami in November. Prior to this latest acquisition, Bezos had already spent $147 million on two mansions in Indian Creek, a renowned enclave often referred to as the “Billionaire Bunker.” Notable residents of the island include Jared Kushner, Ivanka Trump, Tom Brady, and Carl Icahn.
A spokesperson for Bezos declined to comment on the matter. Property records indicate that the house was last sold in 1998 for $2.5 million.
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2. Tesla Deliveries Brutally Drops
As the first quarter drew to a close, Tesla Inc. prompted Wall Street analysts to reassess their predictions.
Despite analysts lowering their estimates for vehicle deliveries, the actual figures fell far short. Led by Elon Musk, the electric car manufacturer delivered just 386,810 vehicles in the first three months of the year, a considerable deviation from Bloomberg’s average estimate.
This deviation is the largest recorded in the past seven years. Consequently, Tesla shares experienced a significant drop of up to 6.7% in intraday trading, contributing to a notable decline in the S&P 500 Index.
Throughout the quarter, numerous concerning signals emerged for Tesla. Initially, the company cautioned that its growth rate would notably decrease this year, attributing this slowdown to interest rate hikes that rendered its cars unaffordable for many consumers, despite price reductions.
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3. Americans Turn to Cheaper Cars
Toyota Motor Corp. and Honda Motor Co. saw significant increases in US sales at the beginning of the year, defying expectations of a broader slowdown in the industry. Toyota reported a more than 20% rise in deliveries in the first quarter, driven by strong demand for the compact Corolla sedan and RAV4 crossover. Similarly, Honda experienced a 17% increase in sales, propelled by the CR-V crossover and Civic compact.
These early results highlight the importance of affordability for car buyers, especially following pandemic-related shortages and high interest rates that inflated costs in recent years. The pricing advantages that boosted automaker profits during the pandemic are now diminishing as production levels return to normal. With inventories on the rise, car companies are offering more incentives, leading to a gradual decline in prices.
In the first quarter, there were remarkable increases in market share for budget cars and compact SUVs, with the growth of sedans matching that of SUVs at Toyota.
Source: Bloomberg – Americans Are Buying Cheaper Cars
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4. UFC Parent Sold For $13bn
Endeavor Group Holdings Inc., a prominent talent agency and major investor in entities like WWE and the Ultimate Fighting Championship (UFC), has agreed to a $13 billion acquisition by the private equity firm Silver Lake Management.
Silver Lake, which already holds a 71% voting stake in Endeavor, has proposed to buy out minority investors at $27.50 per share, as per a statement released on Tuesday. Endeavor, led by influential agent Ari Emanuel, currently holds a market value of approximately $12 billion. The offer has received approval from an independent committee of Endeavor’s board.
This acquisition follows through on plans outlined in October, when Silver Lake expressed its intention. Endeavor had previously indicated frustration with its stagnant stock performance, which has hovered around its initial offering price of $24 per share since its debut nearly three years ago.
Endeavor owns a 51% stake in TKO Group, the parent company of both WWE and the Ultimate Fighting Championship (UFC). This segment of Endeavor’s business alone holds a market value exceeding $15 billion.
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5. Worst Might Be Over For Apple Stock
Apple Inc.’s stock has experienced its poorest quarterly performance relative to the S&P 500 Index in over a decade, prompting traders to seek signs of a potential turnaround. The 12% decline since the beginning of the year has benefited short sellers, leading some to close out their positions. Technical analysts suggest that the stock is approaching levels where investors may be inclined to buy the dip. Furthermore, Apple’s lagging performance may make it appear undervalued compared to other major tech companies.
According to Craig Johnson, chief market technician at Piper Sandler & Co., investors are hesitant to sell their Apple positions due to the company’s dividend, substantial share buybacks, and aversion to incurring capital gains taxes. Johnson believes that the stock may not experience significant further declines and could potentially trade within a range of $165 to $200 until it convincingly surpasses its longer-term moving averages.
As of early Tuesday trading, Apple shares had declined by approximately 1%.
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6. BYD Loses EV Throne to Tesla
BYD, a Chinese electric vehicle manufacturer backed by Warren Buffett, experienced a 42% decline in its electric vehicle deliveries in the first quarter of the year compared to the previous quarter. This decline allowed Tesla to regain its position as the world’s largest seller of battery electric vehicles.
BYD sold 300,114 battery-only vehicles in the March quarter, attributed to flagging demand, increased competition in the Chinese market, and the timing of the Chinese New Year.
In the final quarter of 2023, BYD had surpassed Tesla in EV sales, selling 526,409 electric vehicles compared to Tesla’s 484,507 units sold between October and December.
Tesla’s sales growth has primarily been fueled by its Model 3 and Model Y vehicles. However, the company is not anticipated to introduce its next mass-market vehicle until late 2025.
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7. L.A. Apartment Rents Hit Record Highs
In the first quarter of this year, Los Angeles County saw record-high apartment asking rents, but there was a significant slowdown in multifamily investment sales, according to a new report. The number of units sold in investment sales dropped by 59% compared to 2023.
Despite the decline in sales volume, the average sale price per unit in multifamily investment sales increased. Additionally, the vacancy rate in the sector remained steady at 4.8% in the first quarter, unchanged from the previous three months.
One notable deal during this period was FPA Multifamily’s $186 million purchase of a 34-story, 525-unit luxury high-rise in Downtown L.A. from CIM Group.
According to the report, the average asking rents in Los Angeles County rose by 0.5% quarterly and 0.03% compared to last year. This increase brought the average rent to a record $2,183 per unit per month. In the first quarter, approximately 2,405 units were added to the market, with a significant portion consisting of new high-end units. This influx of high-end units contributed to the rise in the average asking rent.
Source: Commercial Observer – L.A. Apartment Rents Hit Record Highs in Q1, But Sales Have Stalled
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.