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Tesla CEO Threatens To Leave California, Calls Official ‘Ignorant’

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Tesla CEO Elon Musk Says Stock Price ‘Too High’ To Cap Bizarre Week

Tesla CEO Elon Musk took to Twitter on Saturday afternoon and threatened to sue the state of California. He also threatened to move the company’s production facility to Texas or Nevada over what he calls “the last straw.”

“Tesla is filing a lawsuit against Alameda County immediately,” Musk tweeted on Saturday. “The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”

Musk is referencing the Alameda County health officer’s decision. The said officer did not allow the Freemont, California factory to reopen and resume production. Musk and Tesla say this was permitted by California Governor Gavin Newsome on Thursday when he said that manufacturers would be allowed to resume operations.

“Frankly, this is the final straw,” Musk added in a subsequent tweet. “Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future.”

Online Tirades

Of course, this isn’t the first time Musk has railed against the lockdown order.

During Tesla’s earnings call in early May, he described that the shelter-in-place orders in California had “fascist” qualities. He also mentioned that government officials should “give people back their (expletive) freedom.”

“The expansion of shelter-in-place, or as we call it, forcibly imprisoning people in their homes, against all their constitutional rights, is, in my opinion, breaking people’s freedoms in ways that are horrible and wrong, and not why people came to America and built this country,” Musk said. “What the (expletive)!”

Erica Pan said that the county was working with Tesla on a resolution. She is the Alameda County “unelected and ignorant” health officer that Musk referred to. However, the county gave no approval to resume production.

“We have not given the green light,” Pan said. “We have been working with them,” she added. “But no, we have not said that we think that it is appropriate for them to move forward.”

Tesla Can’t Wait

On Friday, she told Reuters that the health department had asked Tesla to wait. She mentioned that the department only asked to wait at least one more week before reopening. The county needs time to continue monitoring infection rates and discuss the safest way to bring back workers.

“This has been a collaborative, good faith effort to develop and implement a safety plan that allows for reopening while protecting the health and well-being of the thousands of employees who travel to and from work at Tesla’s factory,” the Alameda Health Department said in a statement provided to CNN. “The team at Tesla has been responsive to our guidance and recommendations, and we look forward to coming to an agreement on an appropriate safety plan very soon.”

Tesla’s Stance

Last week, reports surfaced, saying that Musk’s Shanghai factory will shut down due to a lack of parts. His plans for the Freemont Plant partially caused his rant. He wanted the plant to reopen so that production for the parts needed in China can start.

Musk also says Tesla knows better how to safely reopen the Freemont plant than country health officials. He says Tesla’s experience in reopening in China factory after lockdown gave them such knowledge.

“Tesla knows far more about what needs to be done to be safe through our Tesla China factory experience than an (unelected) interim junior official in Alameda County,” he tweeted.

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It’s Not ‘Unreasonable’ To See Gold Prices Soar To $4000 During Bull Market

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It’s Not ‘Unreasonable’ To See Gold Soar To $4000 During Bull Market

Despite gaining 35% this year, gold prices have plenty of room to run, says Michael Cuggino, the CEO of the Permanent Portfolio Family of Funds.

Cuggino says that since gold formed a triple bottom from the end of 2015 through November of 2018, it has consistently climbed higher and has really soared this year.

“Ever since then, it has been a gradual move up, then some down. It moves sometimes in big chunks, gives some back, sits around and does nothing, reacts to stimulus, inflation, the value of dollar and euro … but it has had an aggressive move this year,” Cuggino said.

Possible Setbacks Along the Way?

With gold climbing so quickly in a relatively short period of time, Cuggino warns there could be sharp pullbacks along the way. But he says the overall trend is for higher gold prices.

Cuggino says the recipe of continued money printing by the government, the dollar steadily declining and growing inflationary fears mean it would “not be an unreasonable move” to see gold prices soaring to $4,000 an ounce.

He points to a metric that compares gold prices to the closing levels for the S&P 500 index. Gold is currently trading at 0.6 times the level of the S&P 500 and it hasn’t climbed above 0.7 since 2014. But when you go back to August 2011, gold traded as high as 1.7 times the S&P 500, so there’s plenty of upside for gold prices.

Gold Still Has a Long Way to Go

Just adjusting for inflation, gold would need to climb above $2,800 per ounce to equal 1980 levels, which means this gold rally has a long way to go.

Mike Shedlock, the Mish Talk blogger and investment adviser at SitkaPacific Capital Management, thinks the fuel that could push gold to $2,800 per ounce could come from all the hedge funds that are currently on the sidelines and missed the early innings of the gold rally.

“There is ample room for Fear of Missing Out to kick in as the managed money and big spec hedge funds sat out much of the recent rally,” he writes. “And with 105,025 short contracts there is plenty of fuel for a short squeeze too.”

E.B. Tucker, director of Metalla Royalty and Streaming, believes that the current rally will continue, and he thinks gold prices could hit $2,500 by the end of the year.

“Normally I would say [the bull run is overheated] but what I’m seeing in the daily action is that gold is rising in a very measured way and is not meeting much resistance, so when that’s happening you just step out of the way and let it go, that’s what you do,” Tucker said.

Like Cuggino, Tucker says there could be pullbacks in price along the way, but he says we’re in a secular bull market like we may never see again.

“This is a secular bull market. This is a bull market in gold that you’re probably never going to see in the course of your life again.”

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Nasdaq Sets A New Record, Dow Forms A ‘Golden Cross’

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Nasdaq Sets A New Record, Dow Forms A ‘Golden Cross’

Since bottoming in late March, the stock market continues to set records in what seems like an almost invincible climb higher.

Nevermind that Jim Cramer said the rally is being driven by the “power of enthusiastic buyers who do not know what they’re doing” and that he can’t fathom “how stupidly bullish this market can be,” the fact is that stocks are climbing higher.

The latest evidence for a runaway stock market is that the Nasdaq Composite Index just gained 1,000 points. It happened in the shortest amount of time in the last 20 years.

1000-Point Climb

It took 114 days for the index to climb from the 9,000 level to the 10,000 level. That milestone was hit on June 10 of this year.

In just 40 days since, the Nasdaq has tacked on another 1,000 points, climbing above the 11,000 level.

That is the fastest 1000-point gain for the index since it took a blistering 38 days in 1999. Back then, it climbed from the 3,000 level to the 4,000 level.

You might recall that period, it was during the dot-com bubble. We know how that ended.

Today’s 1000-point climb is only a 10% overall gain (from 10,000 to 11,000) compared to the 33% overall gain during the ‘99 surge (from 3,000 to 4,000). However, it’s still a blistering pace that investors pay attention to.

“Although 11,000 by itself doesn’t mean much, these big round numbers are a nice reminder of just how strong this rally has been since the March lows,” said Ryan Detrick, the chief investment strategist at LPL Financial.

A ‘Golden Cross’

Not wanting to miss the fun, the Dow Jones Industrial Average just flashed its own bullish signal to investors.

The index just formed a “golden cross,” where the shorter-term 50-day moving average crosses above the long-term 200-day moving average.

Investors consider this to be a bullish signal for the index, as it shows the short term momentum is strong.

Conversely, when the 50-day moving average crosses below the 200-day it’s called a “death cross” and is a bearish indicator. The last “death cross” was on March 20. On that day, the stock market was pummeled by the economic shutdown caused by the coronavirus pandemic.

With the rally being led by technology stocks, the Nasdaq – which is more than 50% tech stocks – has gained more than 60% since the March lows. The S&P 500 is made up of about 25% tech stocks and has gained nearly 50% since March, and only 20% of the Dow is tech stocks so it’s lagged behind, gaining only 47% since March.

How reliable is the “golden cross” for stocks to move higher? According to Dow Jones Market Data, the last time a “golden cross” failed was in January 2016. That was also the last time the market slipped lower.

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Get In On The Hottest Investment Trend Today: SPACs

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Get In On The Hottest Investment Trend Today: SPACs

The hottest new investment trend right now are SPACs, or special purpose acquisition company. It’s how Nikola Motor Company, which plans on making both electric and hydrogen-powered trucks, went public virtually overnight.

With the IPO market cooling, it has become an appealing alternative for private companies looking for a quicker and easier path to being publicly traded.

Now billionaires are tripping over themselves to create SPACs as quickly as possible. They need to do so if they want to get in on the gold rush.

What are SPACs?

SPACs are commonly referred to as a “blank check” company and with good reason: they are created to go around gathering a bunch of money from investors with the only goal to buy an existing business within a specific time frame, usually 18 to 24 months.

The management team essentially has a blank check to go out and buy any business it sees fit. Some are created with a specific acquisition in mind. Others are created simply to have the money in place and ready to go when the opportunity arises.

The structure is very similar to private equity deals or leveraged buyouts. Also, private equity firms, hedge funds, and other “smart money” investors sponsored the creation of many SPACs.

Many of these SPACs are publicly traded. So, if the idea of having “smart money” go around hunting for the best deals on your behalf sounds appealing, you can typically invest in them through your normal brokerage account.

Here’s a short list of SPACs that you can either buy today or can buy very shortly once they go public. Be aware, many of these SPACs are just a few weeks old. So, there isn’t much history to judge their performance by.

Pershing Square Tontine Holdings (PSTH.U)

Fresh off a billion-dollar payday in March, Pershing Square Capital Management’s Bill Ackman just launched a $4 billion SPAC, the largest in history after overwhelming interest from investors.

Ackman has the right to put in another billion, giving the company access to a total of $5 billion to hunt for what Ackman calls a “unicorn” with “significant long-term growth potential that will be likely candidates for inclusion in the S&P 500 index.”

“Our thesis is by having a $5 billion cash pile in a public company; it’s our own version of a unicorn. It’s a one-of-a-kind entity,” Ackman said during an interview with Yahoo Finance. “So, we’re looking to marry a unicorn. So we’re prettying ourselves up for the most attractive possible partner.”

Churchill Capital IV (CCIV.U)

While not publicly traded yet, this will be founder Michael Klein’s fourth SPAC. Two of them have acquired companies and one has yet to find an acquisition target. To highlight investor demand for SPACs, Klein raised $1.8 billion for his fourth SPAC. This figure stands at 80% more than what he originally planned.

With his latest SPAC, Klein is looking for a company with excellent long-term growth prospects, a strong competitive advantage, recurring revenue, attractive free cash flow. He is also looking for a company that is in an industry where consolidation opportunities exist.

Dragoneer Growth Opportunities (DGNR.U)

Like Churchill Capital, this SPAC is not yet publicly traded. The company is lead by CEO Marc Stad, who appeared multiple times on Fortune magazines “40 Under 40” list. Also, other directors include David Ossip, CEO of Ceridian HCM Holding, and Sarah Frier, CEO of neighborhood social network Nextdoor.

Stad has a strong pedigree, having backed a number of very successful companies in the past, including Spotify and Uber Technologies. Dragoneer will focus on six areas: software, internet, media, consumer/retail, healthcare IT, and financial services/fintech.

East Resources Acquisition (ERESU)

Current Buffalo Bills and Buffalo Sabres owner Terry Pegula started East Resources targeting the energy industry in North America.

It makes sense given Pegula’s history, having sold his company, East Resources, to Royal Dutch Shell for $4.7 billion in 2010.

Now Pegula is back, looking for operational control of a company that has long-lived assets with low fixed costs, that is producing oil and gas and generating free cash flow, but is operating below full capabilities.

With Pegula’s extensive knowledge of the oil and gas industry, he could find multiple opportunities in a short period of time.

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