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Tesla Shares Gain After Elon Musk Sells $5bn

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On Thursday, TESLA shares advanced in premarket trading after Chief Executive Officer Elon Musk had sold about $5 billion of the stock.

This came after Elon Musk’s Twitter poll where he asked his followers whether or not he should sell up to 10% of his share in the company. Following this, the stock plunged by 16% on Monday and Tuesday, dropping Musk’s net worth from $338 billion to $288 billion, according to calculations made by Bloomberg.

The stock made back some lost ground on Wednesday and further rebounded when news went out that Musk had only sold 5%, not 10% of his Tesla shares. As of Wednesday night, Tesla shares were trading at $1,100 each.

However, the Tesla shares had advanced in premarket trading by Thursday following the widespread news that Musk had sold close to $5 billion of the stock. The company’s shares rose 2.7%, recouping some quite heavy losses which it faced this past week.

This recent share sale was Musk’s first share sale since 2016, and was hot on the heels of that fateful Twitter poll where he asked if he should offload 10% of his stake in Tesla, which makes up most of his $281 billion fortune.

Some accused Musk of being eccentric with financial matters, bringing up his many controversial tweets about cryptocurrency coins like DOGE, SHIBA INU, etc. When studying this recent pattern of events, it would indeed seem that Musk acted rashly and handled matters as heavy as Tesla stock (and his net worth) with levity. However, AJ Bell analyst Danni Hewson is convinced that Musk is not so rash.

Hewson stated that people should not think that Elon Musk’s ‘madness’ has no pattern or plan, because there is truly a method to his madness. Hewson asserts that his decisions are not made on a whim, or on the instruction of his Twitter followers. Rather, Hewson states that his decisions have already been made and what he does is nothing short of playing around with the general public.

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Dividends

Dangote Cement, MTN lead Top Paying Dividend Companies of the Year

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Dangote Cement - Investors King

In total, Nigerian companies paid about N989 billion as dividends in the first 9 months of the year. Dangote Cement was responsible for N272 billion of that amount, with MTN paying N212.7 billion.

The N989 billion paid in dividends showed a 27% increase from the same period in 2020. A record of dividends paid by Nigerian companies who have been publicly quoted is maintained by Nairalytics, with the companies including 30 of some of the most capitalized companies on the stock exchange who had paid dividends in 2020 and the current year.

Some companies pay dividends from their full-year profits while others pay twice in the year, first out of their full-year profits and secondly from their half-year profits. Some dividends are also paid out of retained earnings, in the event where companies do not publicly declare their profits.

The data collected for the companies showed that Dangote Cement and MTN were the leading dividend payers in the year, with the companies paying N272 billion and N212.7 billion respectively. Dangote Cement shareholders did not record any significant increase in their dividend payments, while MTN shareholders saw a 23% increase in dividend payments. No other companies paid up to N100 billion in dividends during the year.

Zenith Bank paid N94.2 billion in dividends, coming in as the third highest paying company during the year. GTCO and BUA Cement rounded up the top five, paying N79.5 billion and N70 billion in dividends respectively.

Stanbic IBTC paid N54 billion in dividends to come in as sixth, while Access Bank and Nestle paid N30.2 billion and N27.5 billion respectively, making seventh and eighth. Lafarge and Seplat rounded up the top 10 dividend payers, paying N24.7 billion and N23.1 billion respectively.

In total, the top ten companies paid a combined N888.1 billion in dividends.

A growth in dividend payment, especially in a year heavily hit by the coronavirus pandemic shows resilience in the financials of some of Nigeria’s largest companies.

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Jumia Stock Plunges 41.22 Percent on 91 Percent Jump in Operating Loss

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Jumia - Investors King

In the last one month, the price of Jumia’s stock has dropped by 41.22 percent on growing uncertainty surrounding the future of Africa’s leading eCommerce company shortly after the release of its third-quarter report in November 2021.

The price of Jumia stock dropped by $7.89 or 41.22 percent in the past month to $11.25, suggesting a broad-based selloff amid weak investors’ confidence in a stock that rose to $65.51 per share on Wednesday 10 February 2020 when global investors thought it would replicate the performance of the likes of Amazon and other eCommerce companies that thrived on COVID-19.

This is in spite of the company growing orders by 28 percent to an all-time high of 8.5 million in the third quarter. Even active consumers and Gross Merchandise Volume (GMV) rose 8 percent year-on-year each to 7.3 million and $238 million, respectively.

Still, global investors are not buying into the numbers. In fact, Luke Holbrook, a Morgan Stanley equity research analyst, lowered the bank’s recommendation for Jumia’s stock to underweight from neutral, according to a report by The Motley Fool. Holbrook then advised shareholders to sell their shares at $11 and move on. Indicating he does not have confidence in the company going forward.

Stifel Nicolaus, the only analyst that seems to be positive on Jumia, suggested ‘hold’ with a profit target of $18. Meaning, he is also not sticking his neck out for the once flying stock to hit $65, its COVID-19 peak.

Here is Why Investors Are Abandoning Jumia Stock

Jumia sales and advertising expenses jumped by a shocking 228 percent to $24 million year-on-year but active consumers and GMV only grew by 8.1 percent each. While the 28 percent increase in orders was because the company decided to sell more of everyday consumer items as opposed to its usual higher-value items like electronics. As of the third quarter, the average volume of Jumia sales was $28, down from $41.50 in 2019.

Also, Jumia customers are not returning to the website as much as Amazon and other global eCommerce platforms’ customers. Indicating that customers in Nigeria and other Jumia’s operating nations in Africa are not buying from the website as expected.

Chris Lau, a contributing author at InvestorPlace, put it best, “Jumia will have to spend more on its operations going forward. It needs to bring the right products to its customers. To do so, it must work with its suppliers and sellers. and add international brands to its marketplace, increasing its costs.”

And finally, Jumia operating loss increased by 91.4 percent to $64 million.

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Nigerian Stock Exchange

MTN, Afriprud, UPDC, Others Top Losers as Investors Lose N410 Billion

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Nigerian stock market depreciated further on Wednesday as 23 stocks closed in the red, against 15 stocks that posted profits. The Nigerian Exchange Limited (NGX) sheds N410 billion in value.

Trading activity was mixed as investors exchanged 335,480,224 shares worth N3.552 billion in 3,891 deals during the trading hours of Wednesday,  in contrast to 224,910,096 shares valued at N3.708 billion that were traded in 4,331 transactions on Tuesday.

All-Share Index depreciated by 1.81 percent to 42,463.16 index points after shedding 0.05 percent on Tuesday. Market value declined by N410 billion from N22.567 trillion it closed on Tuesday to N22.157 trillion on Wednesday.

Sectorial analysis showed the Banking Index lost 115bps on ACCESS (-5.29%), ETI (-1.80%) and STERLNBANK (-1.35%). Gainers were JAIZBANK (+1.49%), WEMABANK (+1.27%) and ZENITHBANK (+0.21%).

The NGX Consumer Goods Index lost 14bps on HONYFLOUR (-5.32%), INTBREW (-2.08%), FLOURMILL (-0.85%) and NASCON (-0.35%).  NB (+0.65%) was a gainer in that space today. The NGX Oil and Gas Index lost 12bps on OANDO (-0.63%). The NGX Industrial index inched up 4bps on WAPCO (+0.60%). See other details below.

Year-to-date return moderated to 5.44 percent.

Top Gainers 

Symbols Last Close Current Change %Change
CORNERST N 0.52 N 0.56 0.04 7.69 %
MANSARD N 2.12 N 2.28 0.16 7.55 %
CHAMS N 0.20 N 0.21 0.01 5.00 %
NGXGROUP N 16.40 N 17.00 0.60 3.66 %
FTNCOCOA N 0.39 N 0.40 0.01 2.56 %

Top Losers

Symbols Last Close Current Change %Change
MTNN N 190.00 N 171.00 -19.00 -10.00 %
AFRIPRUD N 6.50 N 6.00 -0.50 -7.69 %
UPDC N 1.07 N 0.99 -0.08 -7.48 %
ROYALEX N 0.54 N 0.51 -0.03 -5.56 %
HONYFLOUR N 3.95 N 3.74 -0.21 -5.32 %

Top Trades

Symbols Volume Value
FBNH 133995395.00 1573889108.40
UNIVINSURE 36193828.00 7238765.60
ZENITHBANK 18339499.00 440113529.90
GTCO 13593251.00 334804045.25
TRANSCORP 10536458.00 10188184.33

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