Former Uber CEO Kalanick Is Leaving The Company’s Board To Focus On New Venture

Plus, the House Judiciary Committee may put forward new articles of impeachment against President Trump pending a key testimony, and Tesla shares finally hit $420.

Stocks opened around the break-even line to start Tuesday’s shortened session with the Dow dipping 35 points. The S&P 500 fell 0.1%, while the Nasdaq hit a new intraday record high.

“The equity narrative is the same as it was at Monday’s close and probably will stay unchanged for the remaining 1.5 weeks of 2019,” said Adam Crisafulli, founder of Vital Knowledge. “But investors will return in January to find a complacent market trading at very elevated multiples and harboring unrealistically optimistic expectations about an upward inflection in growth/earnings momentum.” In 2019, global stock markets added more than $17 trillion in total value, according to Deutsche Bank’s Torsten Slok, as markets have been boosted by easier monetary policy and global geopolitical developments. On the domestic front, the major indexes have seen double-digit gains. The S&P 500 has gained 28%, the Dow has added 22%, and the Nasdaq is up 34%. But heading into next year, analysts project more modest returns with the average outlook seeing a rise of just 4% for the S&P 500 in 2020. “Earnings drive bull markets higher,” said the head of equities at TIAA’s Nuveen investment unit, Saira Malik, whose year-end target for the S&P 500 in 2020 is below the current level at 3,100. “And we’re not going to have much earnings growth when it comes down to it for this year or next year… and we actually expect multiples to contract a bit.”

The House Judiciary Committee said yesterday that it could draft and recommend additional articles of impeachment against President Donald Trump if former White House counsel Don McGahn provides additional evidence, who has been fighting a subpoena to testify before the panel. Lawyers for the Judiciary Committee wrote to the Court of Appeals that McGahn’s testimony is “central” to the panel’s investigation and is “also relevant to the Committee’s ongoing investigations into Presidential misconduct and consideration of whether to recommend additional articles of impeachment. …If McGahn’s testimony produces new evidence supporting the conclusion that President Trump committed impeachable offenses that are not covered by the Articles approved by the House, the Committee will proceed accordingly – including, if necessary, by considering whether to recommend new articles of impeachment.”

Uber co-founder and former CEO Travis Kalanick is stepping down from the ride-hailing company’s board effective on December 31. Kalanick said in a statement that he is exiting the board to “focus on his new business and philanthropic endeavors,” including his latest venture, CloudKitchens, which rents out commercial kitchen space to delivery-based restaurants. The company’s former CEO has unloaded more than $350 million in Uber stock this month, bringing his total sale proceeds to $2.1 billion since his share lockup ended on November 6. 

Tesla shares have hit $420 for the first time yesterday, cashing-in on the 503-day old marijuana joke from CEO Elon Musk that securities regulators didn’t find funny. The electric car maker’s shares rose following a new round of financing arranged from banks in China for its Shanghai car plant. Musk joked on twitter that “the stock is so high lol.” Even as the stock continues to climb, Morgan Stanley analyst Adam Jonas said in a note from yesterday that Tesla shares are trading at an outsized value for an auto manufacturer, and reiterated his price target of $250 for the stock. “We are not bullish on Tesla longer term, especially as, over time, we believe Tesla could be perceived by the market more and more like a traditional auto OEM,” Jonas wrote. “We are prepared for a potential surge in sentiment through 1H20 but question the sustainability.”

Stocks We’re Watching

Microbot Medical (NASDAQ: MBOT): Microbot Medical shares are up more than 83% this morning following the company unveiling the LIBERTY, the world’s first fully disposable robotic system for use in neurovascular, cardiovascular, and peripheral vascular procedures. “LIBERTY is set to revolutionize the way surgical robotics are being used in endovascular procedures, by eliminating the need for capital equipment, reducing radiation exposure and aiming to streamline the use of disposables during these complex procedures,” said Harel Gadot Microbot Medical CEO, President, and Chairman. “In addition, with LIBERTY’s remote operation as well as its “One & Done” capabilities, we believe it has the potential to be the first system to democratize endovascular interventional procedures.”

Soleno Therapeutics (NASDAQ: SLNO): Shares of this biotech are up 22% today following Oppenheimer initiating coverage of the stock with an Outperform rating and a $10 price target – 277% above the current price. According to Oppenheimer analyst Leland Gershell, Soleno’s diazoxide chloride controlled release (DCCR) treatment for Prader-Willi syndrome has demonstrated proof-of-concept and its active ingredient has a long record of human safety. Gershell likes the stock’s risk/reward profile and recommends investors build a position ahead of the unveiling of the Phase 3 results expected in the first half of 2020. 


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