‘Playing With Fire’: Tesla’s Wild Week Gets Hearts Pumping on Wall Street

‘Playing With Fire’: Tesla’s Wild Week Gets Hearts Pumping on Wall Street(Bloomberg) — Paul Nolte would never dream of plugging a stock like Tesla Inc. into a client portfolio at his advisory firm, Kingsview Wealth Management in Chicago. Too volatile. But a bearish options flier for his own account after the thing more than doubled in two months? Maybe.The 34-year money management veteran had been noticing double-digit price gaps that he considers hallmarks of shorts getting squeezed. When the forced buying was over, he figured, support would vanish and the shares would plunge. So he teed up $10,000 worth of puts and waited. And watched. And waited. And thought about it. In the end, he couldn’t pull the trigger.“I was playing with fire,” Nolte said by phone. “I’m better off going to a casino and putting it on black. $10,000 can go to zero really fast.”All week Tesla’s been doing that, tempting and taunting the pros, lighting up brokerage phone lines and getting blood pumping like no time since 1999. If the poster children for the market’s plodding march since 2009 were Apple Inc. and Netflix Inc., Elon Musk’s bear-burner has become the standard bearer for what some now expect to be its last and looniest leg.With the stock spiking from $650 to $950 on Monday and Tuesday, Chris Brown, a Tesla short, barely slept. Lunch with colleagues was canceled and breakfast didn’t come till 2 p.m. He thought about buying the stock after the shares breached a chart line at the end of last week, and selling it Monday — but decided against it. “It was discordant with my fundamental belief.”“When something is going on that is this big and this organized, you sit and watch,” Brown, managing member at Aristides Capital in Toledo, Ohio, said by phone, describing his actions on Monday. “I stared at my computer non-stop, all day.”Tuesday was different. Brown bought a call spread and a few bearish options, priced about half as much as ones betting the rally would keep going. That was the day Tesla plunged 14% into the close. The price of the put contract Brown eyed went from $9 to $12 by the time his order was filled, before soaring to $84. “We ended up making money.”Few were closer to the center of the storm than Dan Ives, a managing director at Wedbush, whose once-bullish price targets were overtaken as Tesla vaulted over $700, $800, $900 in two days. At least 100 investors have called him looking for an edge on a stock that at peak frenzy made Bitcoin feel like a toothpaste maker in terms of buying pressure.What was it like? “Newark Airport,” Ives said. “The chaos around the stock this week was like being in Newark Airport on a Friday night.”Almost $170 billion worth of Tesla shares have traded in five days, three times as much as Apple and five times as much as Microsoft Corp. The stock’s 20-day volatility is nearly twice that of the next bounciest name in the Nasdaq 100, Biogen Inc., which soared 26% this week. Three-quarters of a million trades have been executed since Monday, seven times the number in Boeing Co.“We’re talking about one of the more historic moves in a stock that’s happened over the last decade,” Ives said. “It’s caught the Street by surprise, which is very rare in a market where information is well-known within two seconds of coming out. It’s been out of a Stephen King movie.”Brian Frank sees it differently: Tesla as a harbinger of long-overdue doom, the beginning of the end to the buy-everything ethic that has been making his life miserable as a value investor.Bitcoin is the only other asset that has elicited as many calls, Frank said, maybe 5% of his clients have phone about Tesla. Those all stopped when the shares rolled over on Wednesday, giving up 17%.“That it can happen with something as big and as visible as Tesla – it gives me hope that it’s clear there are bubbles out there,” said Frank, president at Frank Capital Partners in Key Biscayne, Florida. “This is an over-$100 billion company that’s clearly in the old Eiffel Tower pattern, exactly like Bitcoin. And many other bubbles look like that, too.”To contact the reporters on this story: Elena Popina in New York at [email protected];Vildana Hajric in New York at [email protected] contact the editor responsible for this story: Jeremy Herron at [email protected] more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Indian airline SpiceJet confirms breach of 1.2 million passenger details

SpiceJet, one of India’s largest privately owned airlines, has confirmed a data breach involving the details of over a million of its passengers.

The security researcher, who described their actions as “ethical hacking” but whom we are not naming as they likely ran afoul of U.S. computer hacking laws, gained access to one of SpiceJet’s systems by brute-forcing the system’s easily-guessable password. An unencrypted database backup file on that system contained private information of more than 1.2 million passengers of the budget-carrier last month, TechCrunch has learned.

Each record included details such as name of the passenger, their phone number, email address, and their date of birth, the researcher told TechCrunch. Some of these passengers were state officials, they said.

The database included a rolling month’s worth of flight information and details of each commuter, they said, adding that they believe that the database was easily accessible for anyone who knew where to look.

The researcher alerted SpiceJet about the database, but said they never received a meaningful response. TechCrunch reviewed a sample of the passenger list as well as the researcher’s email correspondence with SpiceJet representatives. The researcher later alerted CERT-In, a government-run agency in India that handles cybersecurity threats in the nation. The agency confirmed the security lapse, and alerted SpiceJet, which has since taken the necessary measures to protect the database.

A SpiceJet spokesperson in India acknowledged the security lapse, but declined to elaborate.

In a statement, the airline shared the following boilerplate, “at SpiceJet, safety and security of our fliers’ data is sacrosanct. Our systems are fully capable and always up to date to secure the fliers’ data which is a continuous process. We undertake every possible measure to safeguard and protect this data and ensure that the privacy is maintained at the highest and safest level.”

SpiceJet commands roughly 13% of the market share in India, which is the fastest growing aviation market globally. The airline flies over 600 planes each day, including several that connect India to foreign regions such as Dubai and Hong Kong.

About 12 million people in India fly each month.

McDonald's quarterly sales growth, profit beat Wall Street estimates

McDonald's quarterly sales growth, profit beat Wall Street estimatesOver the past few years, McDonald’s has focused on improving dining experience by bringing technology to stores and shoring up delivery services, while also adding new burgers, beverages and breakfast foods to its menus to lure customers. Chief Executive Officer Chris Kempczinski, who took charge in November after the company’s previous chief was dismissed, said the annual global comparable sales growth of 5.9% was the chain’s highest in more than 10 years. As a part of its former CEO’s vision, the company began modernizing stores and even bought two smaller technology firms that focus on digitizing stores and drive-thru menus.


McDonald's quarterly sales growth, profit beat Wall Street estimates

McDonald's quarterly sales growth, profit beat Wall Street estimatesOver the past few years, McDonald’s has focused on improving dining experience by bringing technology to stores and shoring up delivery services, while also adding new burgers, beverages and breakfast foods to its menus to lure customers. Chief Executive Officer Chris Kempczinski, who took charge in November after the company’s previous chief was dismissed, said the annual global comparable sales growth of 5.9% was the chain’s highest in more than 10 years. As a part of its former CEO’s vision, the company began modernizing stores and even bought two smaller technology firms that focus on digitizing stores and drive-thru menus.


Hong Kong’s Stock Market Slump Was Not as Painful as Feared

Hong Kong’s Stock Market Slump Was Not as Painful as Feared(Bloomberg) — It could have been a lot worse for Hong Kong’s big market reopen as investors sought to gauge the widening impact of the coronavirus on China’s economy.The Hang Seng Index fell as much as 3% Wednesday on the first day of trading after the Lunar New Year. Though that was briefly its worst slide on a closing basis since October 2018, the index steadied to end the day 2.8% lower — matching its loss from Jan. 21. Meanwhile, the offshore yuan strengthened 0.1% to 6.9587 per dollar.While the stock declines were steep — especially for landlords, travel firms and casinos — they were by no means unusual for a market that’s been walloped by trade tensions and violent protests in the past year. Before today, the Hang Seng Index had on 20 occasions closed at least 1.5% lower since the start of 2019, compared to just 10 times for the S&P 500 Index. A 6.5% loss in FTSE China A50 Index futures since Friday had also set traders up for a more painful reopen.Airlines Scramble to Cancel China Flights as Virus SpreadsTraders said higher-than-average volume helped limit volatility, despite trading links with onshore markets being shut due to the extended holiday in mainland China. It marked the first time since Friday morning that the city’s traders could catch up with the risk-off sentiment that has dominated global markets. For some, that meant buying stocks on the cheap on speculation that the economic impact from the virus outbreak will be contained. For others, that’s still a dangerous bet to make.“It shows that there is still a group of investors who might be more optimistic,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai Co. “The index may find some support around 27,000 first. But I think buying at this level is a bit risky, because the number of cases is likely to keep rising.”Losses were also capped by a rebound in U.S. markets overnight, which helped stoke a 1.3% gain in FTSE China A50 Index futures. Hong Kong traders had been off their desks since before reported cases of the novel coronavirus surged globally and the number of confirmed deaths in China rose by more than threefold. Mainland Chinese markets won’t reopen until next week.“The unpredictability part is the key source of stress in the market,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. “The next few days to early February will be critical. If we are able to keep cases outside Hubei province low, this means the city lockdown works and may help alleviate the concern.”Travel and consumer-related stocks were among the worst hit on Wednesday as people in China increasingly stay at home during what is usually a peak spending period. Macau casinos Galaxy Entertainment Group and Sands China Ltd. fell at least 5% after China said it will stop issuing travel permits for mainland citizens to visit the city. Cathay Pacific Airways Ltd. and China Southern Airlines Co. lost at least 3%, while Alibaba Pictures Group Ltd. slumped 9.5% as cinemas closed across the country.Financial markets in China will reopen on Monday after the central government extended the Lunar New Year holidays in the mainland. China pledged to provide abundant liquidity for money markets and urged investors to evaluate the impact of the coronavirus objectively. Some 6,000 people have been infected in China, and at least 132 have died. Hong Kong has reported eight confirmed cases.Along with stocks, the People’s Bank of China confirmed that interbank, bond, bill, gold and currency markets will reopen Feb. 3.“We expected to see strong economic momentum in China before, but now the pace of growth may slow,” said Banny Lam, managing director and head of research at CEB International Investment in Hong Kong. “Markets will remain very volatile due to the uncertainty.”\–With assistance from Tian Chen.To contact the reporters on this story: Jeanny Yu in Hong Kong at [email protected];Sofia Horta e Costa in Hong Kong at [email protected] contact the editor responsible for this story: Richard Frost at [email protected] more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


GLOBAL MARKETS-Stocks crumble as deadly coronavirus spreads, safe havens in demand

GLOBAL MARKETS-Stocks crumble as deadly coronavirus spreads, safe havens in demandAsian stocks extended a global selloff on Tuesday as China took more drastic steps to combat the coronavirus, while bonds found favour on expectations central banks would need to keep stimulus flowing to offset the likely economic drag. As the death toll reached 100 and the virus spread to more than 10 countries, including France, Japan and the United States, some health experts questioned whether China can contain the epidemic. China has already extended the Lunar New Year holiday to Feb. 2 nationally, and to Feb. 9 for Shanghai.