Why Is Yelp (YELP) Down 35.5% Since Last Earnings Report?

It has been about a month since the last earnings report for Yelp (YELP). Shares have lost about 35.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Yelp due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Yelp Reports Q4 Results

Yelp fourth-quarter 2019 earnings of 24 cents per share missed the Zacks Consensus Estimate of 26 cents and declined 35% year over year.

Revenues of $269 million also lagged the Zacks Consensus Estimate of $273 million. However, the figure increased 10% year over year, driven by higher advertising revenues. Higher-than-anticipated seasonal reductions by SMB customers resulted in lower-than-guided growth.

Quarterly Details

Advertising revenues (95% of total revenues) increased 10% year over year to $259 million. The increase was driven by growth in the number of Paying advertising locations and higher advertising budgets from Multi-location customers. Paying advertising locations grew 4% year over year to 565K sites.

Yelp continues to benefit from its Home & Local services, boosted by revenues from ‘Request-A-Quote,’ which surged 70% year over year.

Transaction revenues were $3 million in the fourth quarter of 2019, down 12% from the year-ago quarter. Reduction in fees earned from Grubhub for processing credit card transactions related to Grubhub orders that originated on the platform has been a dampener.

Other services revenues rose 23% to $7 million, driven by growth of Yelp Reservations and Yelp Waitlist.

Cumulative reviews rose 16% year over year to 205 million. App unique devices climbed 8% year over year to 36 million on a monthly-average basis.

Yelp reported adjusted EBITDA of $61 million, up 15% year over year. Moreover, adjusted EBITDA margin expanded 100 basis points (bps) on a year-over-year basis to 23%, driven by controlled operating expenses.

Balance Sheet & Cash Flow

As of Dec 31, 2019, Yelp’s cash, cash equivalents & marketable securities were $466 million, up from $417 million as of Sep 30, 2019.

Net cash flow from operating activities was $56 million compared with $51 million in the previous quarter.


For the first quarter, Yelp expects revenues to increase in the 8-10% range year over year. Moreover, adjusted EBITDA margin is expected to drop 2 percentage points on a year-over-year basis.

The company expects to achieve 10-12% revenue growth in 2020.

Adjusted EBITDA margin is projected to improve 1-2 percentage points in 2020 to 22-23%.

How Have Estimates Been Moving Since Then?

Estimates review followed a downward path over the past two months. The consensus estimate has shifted -118.46% due to these changes.

VGM Scores

At this time, Yelp has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.


Yelp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Astronomers discover scorching hot planet where it rains liquid iron

On one particularly hot planet, hundreds of light-years away from Earth, the forecast is cloudy with a chance of liquid iron rain. Scientists recently discovered the bizarre exoplanet, which they referred to as one of the most “extreme” they’ve ever observed.

Using the Very Large Telescope (VLT) at the European Southern Observatory (ESO), researchers observed an “ultra-hot” giant exoplanet, where temperatures can exceed 2,400 degrees Celsius during the day — hot enough to vaporize metals.

One face of the planet, its “day side,” is always facing its parent star and permanently roasting, while the cooler “night side” remains in constant darkness. Because of this, when strong winds push vaporized iron to the night side, it condenses into droplets, creating an iron rainstorm.

On the day side, the planet receives thousands of times more radiation from its parent star than the Earth does from the sun. The extreme heat causes intense winds that bring iron vapor from one side to the other, where the temperature cools to around 1,500 degrees Celsius.

“One could say that this planet gets rainy in the evening, except it rains iron,” David Ehrenreich, a professor at the University of Geneva in Switzerland, said in a press release. Ehrenreich led a study on the exotic planet, known as WASP-76b, which published this week in the journal Nature.

WASP-76b is located some 640 light-years away from Earth in the constellation Pisces. It’s a gas giant, like Jupiter and Saturn in our solar system.

Using the new Echelle Spectrograph for Rocky Exoplanet- and Stable Spectroscopic Observations (ESPRESSO instrument on ESO’s VLT in the Chilean Atacama Desert, astronomers found day-night chemical differences for the first time on a “hot Jupiter” planet. A strong amount of iron vapor at the border separates the planet’s two sides.

The astronomers were able to detect the chemical differences using the very first scientific observations done with ESPRESSO by a team from Portugal, Italy, Switzerland, Spain and ESO in September 2018.

“The observations show that iron vapor is abundant in the atmosphere of the hot day side of WASP-76b,” said María Rosa Zapatero Osorio, an astrophysicist at the Center for Astrobiology in Madrid, Spain, and the chair of the ESPRESSO science team. “A fraction of this iron is injected into the night side owing to the planet’s rotation and atmospheric winds. There, the iron encounters much cooler environments, condenses and rains down.”

The team plans to use the tool to continue hunting for Earth-like planets and studying exoplanet atmospheres. “What we have now is a whole new way to trace the climate of the most extreme exoplanets,” said Ehrenreich.

How Does Caterpillar’s (NYSE:CAT) P/E Compare To Its Industry, After The Share Price Drop?

Unfortunately for some shareholders, the Caterpillar (NYSE:CAT) share price has dived 34% in the last thirty days. Indeed the recent decline has arguably caused some bitterness for shareholders who have held through the 30% drop over twelve months.

All else being equal, a share price drop should make a stock more attractive to potential investors. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). The implication here is that long term investors have an opportunity when expectations of a company are too low. One way to gauge market expectations of a stock is to look at its Price to Earnings Ratio (PE Ratio). A high P/E implies that investors have high expectations of what a company can achieve compared to a company with a low P/E ratio.

How Does Caterpillar’s P/E Ratio Compare To Its Peers?

We can tell from its P/E ratio of 8.55 that sentiment around Caterpillar isn’t particularly high. We can see in the image below that the average P/E (16.0) for companies in the machinery industry is higher than Caterpillar’s P/E.

This suggests that market participants think Caterpillar will underperform other companies in its industry. Many investors like to buy stocks when the market is pessimistic about their prospects. You should delve deeper.

How Growth Rates Impact P/E Ratios

Generally speaking the rate of earnings growth has a profound impact on a company’s P/E multiple. Earnings growth means that in the future the ‘E’ will be higher. And in that case, the P/E ratio itself will drop rather quickly. And as that P/E ratio drops, the company will look cheap, unless its share price increases.

Caterpillar’s earnings per share grew by -4.4% in the last twelve months. And it has bolstered its earnings per share by 22% per year over the last five years.

Remember: P/E Ratios Don’t Consider The Balance Sheet

The ‘Price’ in P/E reflects the market capitalization of the company. In other words, it does not consider any debt or cash that the company may have on the balance sheet. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).

Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).

So What Does Caterpillar’s Balance Sheet Tell Us?

Caterpillar’s net debt is 60% of its market cap. This is enough debt that you’d have to make some adjustments before using the P/E ratio to compare it to a company with net cash.

The Verdict On Caterpillar’s P/E Ratio

Caterpillar’s P/E is 8.6 which is below average (13.3) in the US market. The meaningful debt load is probably contributing to low expectations, even though it has improved earnings recently. Given Caterpillar’s P/E ratio has declined from 12.9 to 8.6 in the last month, we know for sure that the market is more worried about the business today, than it was back then. For those who prefer invest in growth, this stock apparently offers limited promise, but the deep value investors may find the pessimism around this stock enticing.

Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is not as bad as the P/E ratio indicates, then the share price should increase as the market realizes this.

These two tiny spacecraft will help pave the way for astronauts to return to the moon

If NASA astronauts land on the moon as planned in 2024, they’ll have an advantage their Apollo predecessors lacked: insights gathered by tiny robotic spacecraft that visit the moon before them.

NASA has announced the first two such projects selected to fly as part of the Artemis program to land astronauts on the moon: Lunar Flashlight and the Cislunar Autonomous Positioning System Technology Operations and Navigation Experiment (CAPSTONE). The missions represent the next step for the small spacecraft, known as cubesats, which became available for Earth orbit in the 1990s as electronics and sensors shrank to allow bread-box-sized (or slightly larger) satellites to perform scientific work. Since then, cubesats have become so powerful that they are used regularly for Earth observations. And the first interplanetary cubesats successfully flew to Mars in 2018 with the NASA InSight mission, so the spacecraft are becoming hardy enough for deep-space missions.

Thanks to their diminutive size, cubesats are both easy to pack on a rocket and cheap to launch. They often ride along with larger satellites. As NASA’s Artemis program aims to return astronauts to the moon in 2024, NASA is planning to launch the first lunar cubesats in 2021.

“In the case of lunar exploration, cubesats are proving themselves to be increasingly capable platforms to precede human explorers on the moon and Mars,” Christopher Baker, small spacecraft technology program executive within NASA’s Space Technology Mission Directorate, said in a NASA statement.

The agency has said that a total of 13 cubesats will fly on the first flight in the program, Artemis I, which is currently scheduled for the second half of 2021 after timeline slips. That mission will send an Orion spacecraft on an uncrewed loop around the moon to test lunar technologies ahead of human landings.

One of those cubesats will be Lunar Flashlight, a collaboration among several NASA centers, which will look for ice deposits in permanently shadowed craters of the moon and try to estimate how much ice is there, using lasers. Explorers hope that water ice can address needs for drinking water or rocket fuel. (Water is also heavy to tote from Earth, so the ability to get water from lunar ice would reduce the cost of future exploration missions.) Another satellite with ground-penetrating radar, or some rover missions, could follow Lunar Flashlight to better characterize the depth of the deposits.

The second newly confirmed cubesat, CAPSTONE, is a commercial collaboration. And this cubesat won’t launch on a NASA rocket; instead, it is scheduled to fly on a Rocket Lab Electron vehicle in early 2021. CAPSTONE will fly in the same lunar orbit planned for NASA’s Gateway space station, to test entering the unusual orbit. Orbiting the moon is further complicated by mass concentrations under the lunar surface that perturb orbits, and NASA doesn’t want to risk launching the larger and more expensive Gateway without a test. “No spacecraft has been placed there,” Baker said. “We want to measure what it takes to get into and remain in that orbit,” particularly fuel, he said.

CAPSTONE will also test future navigation without reliance on tracking from Earth, by figuring out the satellite’s position relative to NASA’s Lunar Reconnaissance Orbiter. This technique will allow missions to venture deeper into space without needing constant contact with Earth.

NASA is also looking at the possibility of using swarms of cubesats that work together to make observations and solve problems. Baker suggested that these cubesats could be used as a “quick reaction” tool to let researchers respond to the most pressing data as it comes in.

“Frankly, given the pace of the small spacecraft community, [along with] our academic and industry partners, there may well be an underestimation of what we can accomplish in the next five years,” he said.

Elon Musk on humans in Mars before he dies, urges faster pace of progress

Elon Musk has a major goal: to get humanity to Mars before he dies. A lofty goal that he reiterated before a crowd on Monday at the Satellite 2020 conference in Washington D.C.

“If we don’t improve our pace of progress, I’m definitely going to be dead before we go to Mars,” Musk said to the journalists and industry leaders in attendance.

SpaceX, founded by Musk in 2002, nabbed the first of many lucrative deals for the burgeoning rocket company in 2008 when the company was named one of two corporations that would ferry cargo to the International Space Station (ISS). (Orbital Sciences, now Northrop Grumman is the other.)

To date, SpaceX has flown 20 cargo resupply missions to the space station, and very soon will send an upgraded version of the Dragon to ferry astronauts to the orbital outpost as well. But this is just the beginning for Musk and SpaceX.

Musk has his sights set on the moon and Mars. But he’s worried that our current technology isn’t progressing as quickly as it should in order to make Mars happen. That’s evident if you look at the commercial crew program.

In 2011, NASA’s storied fleet of space shuttles retired, and space agencies around the world were forced to rely solely on the Russian Soyuz to transport astronauts to and from space. That agreement would only be temporary as NASA tapped SpaceX and Boeing with the task of building its next-generation astronaut taxis.

Innovation takes time, and after years of delays due to various reasons, SpaceX is on the cusp of launching its first set of astronauts. Bob Behnken and Doug Hurley will board the Crew Dragon spacecraft and fly to the ISS as early as this May. NASA is still trying to iron out the details (like how long they will stay) as SpaceX completes the last two parachute tests prior to launch.

Simultaneously, Musk and SpaceX are working on a massive rocket that will ferry people and cargo to Mars. Called Starship, the heavy-lifter is approximately 400-feet of stainless steel that could transport the first people to the red planet. That is if all goes as planned.

Eagle-eyed onlookers first spotted the towering silver craft in Jan. 2019 at SpaceX’s work site in Boca Chica, TX. That initial prototype was the first step towards reaching Mars and Musk’s goal of building a city on Mars with up to one million people in it, preferably sometime within the next 50 years.

To do so, SpaceX will need a fleet of massive, silvery spaceships. The company is on its third test article, but Musk hopes to ramp up production to one Starship a week by year’s end.

“Unless we improve our rate of innovation dramatically, then there is no chance of a base on the moon or Mars,” Musk said during the conference. “This is my biggest concern.”

Starship will launch atop a Super Heavy launcher. In true SpaceX fashion, both vehicles will be reusable, which lowers the cost significantly. Musk has said that eventually, each Starship mission could cost a mere $2 million.

Starship could launch as early as this year, especially if production rates ramp up the level that Musk hopes. So far, the craft is already booked for one trip around the moon sometime in 2023. That Starship will carry Japanese billionaire Yusaku Maezawa.

Musk also squashed the notion that his Starlink internet service would go public. According to Musk, that endeavor could net his company as much as $30 billion, if it doesn’t go bankrupt. “Guess how many LEO constellations didn’t go bankrupt? Zero,” he said. “We just want to be in the non-bankrupt category.”

So for now, Musk says SpaceX is focused on getting the project off the ground and not spinning it into a publicly-traded company. SpaceX officials have said that the service could roll out later this year in a limited capacity until more satellites come online. To date, the company has launched 300 Starlink satellites, with another batch of 60 set to launch on Saturday (Mar. 14).

Pentagon Asks to Reconsider Awarding Huge Cloud Contract to Amazon

SAN FRANCISCO — The Defense Department said on Thursday that it would re-evaluate the awarding of a $10 billion cloud computing contract to Microsoft after sustained protest from Amazon, which had contended that it lost the deal because of potential interference from President Trump.

In a legal brief filed to the Court of Federal Claims, the Justice Department requested the reconsideration after Amazon argued in federal court that its offerings and pricing had been incorrectly assessed by the Pentagon. The Defense Department requested 120 days to reassess the award. The judge in the case, Patricia E. Campbell-Smith, is expected to allow the re-evaluation to go forward, though she has not yet made an official ruling.

The reconsideration is the latest twist in the enormous contract, known as the Joint Enterprise Defense Infrastructure, or JEDI, which was considered to be a prize for technology companies.

Amazon, a cloud computing giant, had widely been considered the front-runner to win the contract before it was awarded to Microsoft in October. Amazon then pushed to overturn the decision, arguing that President Trump interfered because of his dispute with Jeff Bezos, the founder of Amazon and the owner of The Washington Post. The Washington Post has aggressively covered the Trump administration.

Doug Stone, an Amazon spokesman, said in a statement on Thursday that the company was “pleased that the D.O.D. has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary.” He added that Amazon looked forward to action “that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award.”

A spokesman for the Defense Department did not immediately respond to a request for comment.

“We believe the Department of Defense made the correct decision when they awarded the contract,” said Frank X. Shaw, a Microsoft spokesman, adding that the company remains confident that its proposal “is the right choice for the D.O.D.”

The Pentagon’s rapid change of position raises the question of whether it suddenly found merit in Amazon’s objections, or whether officials feared that the court action challenging the award would inevitably surface emails or memorandums suggesting Mr. Trump interfered in the selection.

But a Defense Department official, who was not authorized to speak publicly, said the filing would force Amazon to prove the allegations of bias it has leveled against Mr. Trump — a difficult legal challenge.

Although Amazon has sought to depose Mr. Trump and senior Defense Department officials to fight against the award to Microsoft, its legal arguments challenging the way the contract was awarded have focused on how the Defense Department did not accurately assess the way that it would be charged for certain services.

In February, Judge Campbell-Smith sided with Amazon on the pricing issue, issuing a temporary injunction that prevented Microsoft from continuing to work with the Defense Department on the contract.

The back-and-forth has put the Pentagon in an awkward spot. Last month, speaking to reporters at the Munich Security Conference, Defense Secretary Mark T. Esper argued that it was time to abandon challenges and move ahead with building the cloud. Time was of the essence, he said, and American national security was on the line.

“It’s important to the war-fighters that we move forward on this contract,” he said. “We have to move forward. It’s gone on too long.”

When asked whether he was pressured on who could receive the $10 billion contract, Mr. Esper said, “Look, I’m not going to get into that part, because I don’t talk about my discussions with the president and White House officials.”

He said he educated himself about the Pentagon’s transition to the cloud when he took office last year and said he “heard a lot” about the competition to build it, particularly on Capitol Hill, before ultimately recusing himself from the decision over the award because his son works at IBM, one of the companies that bid on the contract.

But when a reporter pointed out he had left open the possibility of pressure from Mr. Trump or other aides, he said: “I never felt pressure from the White House.”

SpaceX Dragon spacecraft caught by robotic space station arm for the last time

On March 9th, SpaceX’s CRS-20 Cargo Dragon completed an uneventful journey to the International Space Station (ISS), where the spacecraft was successfully captured giant robotic arm for the last time.

Barring several major surprises, Dragon’s March 9th capture was the last time a SpaceX spacecraft berthed with a space station for the foreseeable future – possibly forever. Referring to the process of astronauts manually catching visiting vehicles and installing them on an airlock with a giant, robotic arm, berthing is a much younger technology than docking and was developed as an alternative for a few particular reasons. Perhaps most importantly, the Common Berthing Mechanism (CBM) ports used by Cargo Dragon, Cygnus, and HTV spacecraft are more than 60% wider than standard docking ports. In other words, spacecraft that berth can transport substantially larger pieces of cargo to and from the space station.

More significantly, however, the CBM standard came about in large part due to the decision to assemble the ISS out of 16 pressurized segments, each separately launched into orbit. Measuring about 1.25m (4.2 ft) wide, the CBM ports that connect most of the space station’s 16 livable segments make the ISS far more practical for the astronauts that crew it, while also allowing for larger hardware to be moved between each module. With Crew Dragon, design requirements meant that SpaceX had to move from berthing to docking, a trait SpaceX thus carried over when it chose to base its Cargo Dragon replacement on a lightly-modified Crew Dragon design.

Now verging on routine, Cargo Dragon capsule C112 began its final approach to the International Space Station on March 9th, pausing at set keep-out zones while SpaceX operators waited for NASA and ISS approval to continue. After several stops, Dragon arrived at the last hold point – some 10m (33 ft) away from the station – and NASA astronaut Jessica Meir manually steered Canadarm2 to a successful capture, quite literally grabbing Dragon with a sort of mechanical hand.

At that point, Dragon – like a large ship arriving in port with the help of tugboats – is in the hands of external operators. At the ISS, Canadarm2 essentially flips itself around with Dragon still attached, carefully and slowly mating the spacecraft with one of the station’s free berthing ports. Unlike docking ports, the active part of a berthing port is located on the station’s receiving end, where electromechanical latches and bolts permanently secure the spacecraft to the station and ensure a vacuum seal.

Finally, once berthing is fully complete, ISS astronauts can manually open Dragon’s hatch, giving them access to the two or so metric tons (~4000 lb) of cargo typically contained within. All told, the process of berthing is relatively intensive and expensive in terms of the amount of time station astronauts and NASA ground control must spend to complete a single resupply mission. From start to finish, excluding training, berthing takes a crew of two station astronauts some 9-12 hours of near-continuous work from spacecraft approach to hatch open.

One definite benefit of the docking approach Crew Dragon and Cargo Dragon 2 will use is just how fast it is compared to berthing. Because docking is fundamentally autonomous and controlled by the spacecraft instead of the station, it significantly reduces the workload placed on ISS astronauts. Crew members must, of course, remain vigilant and pay close attention during the critical approach period, particularly with uncrewed Cargo Dragon 2 spacecraft. However, the assumption is always that the spacecraft will independently perform almost all tasks related to docking, short of actually offloading cargo and crew.

For now, CRS-20 will likely be SpaceX’s last uncrewed NASA cargo mission for at six months. CRS-21 – Cargo Dragon 2’s launch debut – is currently scheduled no earlier than (NET) Q4 2020. Nevertheless, Crew Dragon’s next launch – also its astronaut launch debut – could lift off as early as May 2020, just two months from now. With both SpaceX’s crew and cargo missions soon to consolidate around a single spacecraft, the odds are good that Dragon 2 will wind up flying far more than Dragon 1, and the start of its increasingly common launches is just around the corner.

PepsiCo Seeks Boost In Energy Drink Market With Purchase Of Rockstar

Beverage giant PepsiCo, Inc. has agreed to purchase energy drink maker Rockstar Energy Beverages for $3.85 billion dollars, the company announced Wednesday. It’s a move PepsiCo said will help it become “more consumer-centric and capitalize on rising demand.”

Energy drinks have been a relatively weak area for PepsiCo and its rival Coca-Cola, but both companies have trying to bolster their presence in the fast-expanding beverage category.

The move also reflects the shifting tastes as consumers have steadily weaned themselves from soda to other offerings that also include coffee and tea-flavored beverages and low-calorie drinks.

Though sometimes confused with or lumped into the beverage category that includes sports beverages, energy drinks are considered a different product.

“They are marketed to increase alertness and energy levels, containing significant amounts of caffeine and as much or more sugar as in soda. Many energy drinks pack about 200 mg of caffeine, the amount in two cups of brewed coffee,” according to Harvard’s The Nutrition Source website.

As the market for energy drinks grows, companies like PepsiCo, which already had a distribution deal with Rockstar in North America, are seeking capitalize on that demand.

“Over time, we expect to capture our fair share of this fast-growing, highly profitable category and create meaningful new partnerships in the energy space,” PepsiCo Chairman and CEO Ramon Laguarta said in a statement.

Russ Weiner, Rockstar’s founder, added that he was excited to take the PepsiCo-Rockstar relationship “to the next level.”

“PepsiCo shares our competitive spirit and will invest in growing our brand even further. I’m proud of what we built and how we’ve changed the game in the energy space,” Weiner said.

PepsiCo’s portfolio of energy drinks already includes Mountain Dew’s AMP and Game Fuel. Another drink listed under juice beverages includes Mountain Dew Kickstart.

Coca-Cola’s portfolio includes a stake in energy giant Monster as well as Coca-Cola Energy, which it began selling in the U.S. this year, according to a company press release.

As the Wall Street Journal points out, the PepsiCo-Rockstar deal has not yet closed, but if it does, it will be the first big acquisition Pepsi has made since 2018 when it acquired the seltzer-maker SodaStream.

It also represents the first major deal under Laguarta, who took over as PepsiCo’s top executive after his predecessor, Indra Nooyi, stepped down in 2018. She led the company for 12 years.

Elon Musk says he’s looking to open a Tesla Cybertruck factory in ‘central USA’

Tesla CEO Elon Musk took to Twitter on Tuesday evening to announce plans to open factories for the company’s all-electric Cybertruck pickup and the Model Y crossover SUV.

“Scouting locations for Cybertruck Gigafactory. Will be central USA,” Musk wrote. “Model Y production for east coast too.”

Musk unveiled the truck, Tesla’s sixth model, in November at a company event in Los Angeles, and said it will start at $39,900. The truck, shaped like a large metallic trapezoid, will be competing against American-made trucks like the Ford F Series and General Motors’ Chevrolet Silverado.

The Model Y, announced in March, will seat up to seven and could start deliveries in the first quarter of this year, according to a December report from Deutsche Bank. Should Tesla build Model Ys in the new factory, the vehicle will be manufactured in four places — China, Germany and Fremont, California, are the others.

Investors have grown accustomed to Musk making lofty promises that either end up being premature or don’t come true at all, such as a 2016 promise to have a Tesla drive itself across the U.S. by the end of 2017, and multiple predictions for Model 3 production numbers that the company did not reach.

He’s also hinted at other facilities in the U.S.

Bond King Gundlach says ‘things have to get worse’ in the market

DoubleLine Capital CEO Jeffrey Gundlach told CNBC’s Scott Wapner in an email that the credit market is holding up so far during Monday’s turbulent trading, but that he expects it to get worse.

“I am concerned. Things have to get worse – you don’t have a move like this end without disorder. It just never happens,” Gundlach, who’s also known as the “Bond King,” said, according to Wapner, who read portions of the email on “Power Lunch.”

The 10-year Treasury yield hit a record low 0.318% in overnight trading, while the big drop in oil prices raised concern about the high-yield debt market, which includes a lot of bonds from energy companies.

The prices of riskier bonds did fall Monday, with the iShares High Yield Government Corporate Bond ETF down 4.3%, but the credit market is still holding up overall, Gundlach said.

“Given that every single market is down big and the Treasury market is up big – given that context the credit market is more orderly than you would expect,” Gundlach said.

The volatile moves in stocks and Treasurys over the last several weeks have led to pressure on the Federal Reserve to cut interest rates. The Fed already lowered its benchmark interest rate by 50 basis points in an emergency reduction March 3, but the market is pricing in more cuts in the months ahead.

Gundlach, however, said he thought it might be too soon for the central bank to step in.

“These calls for more Fed action seem early. The stock market isn’t even down 20% from its all-time high,” Gundlach said.

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