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The Humm Group Ltd (ASX: HUM) share price is under pressure on Friday.

In afternoon trade, the financial services company’s shares are down 7% to 47 cents.

Why is the Humm share price sinking?

Investors have been selling down the Humm share price on Friday amid concerns over its exposure to the alleged fraud of Forum Finance.

Last year Humm revealed that the company’s decommissioned Managed Services business provided equipment finance to Forum Finance between 2016 and 2018.

However, following the shutdown of the business, the majority of these assets were sold to a third party and transferred off the company’s balance sheet in 2018.

An initial review estimated the maximum historical exposure to Forum Finance including receivables on-sold to be $12 million post tax.

This morning the company released an update on its potential exposure to Forum Finance. Positively, management confirmed that it “remains of the view that its estimate of the extent of the exposure is reasonable.”

So why are its shares falling?

Although Humm appears confident that its impact from the potential fraud, including receivables that were sold on, is $12 million post tax, one of the buyers of these receivables disagrees.

Today’s announcement confirms reports that Sumitomo Mitsui Banking Corporation has lodged a statement of claim in relation to a potential exposure to Forum Finance.

News Corp media is reporting that Sumitomo Mitsui Banking Corporation is chasing Humm for ~$34 million. It alleges that the company was negligent in selling it items linked to the Forum Group and misled the bank.

Following today’s disappointing decline, the Humm share price is now down by approximately 50% in 2022.

The post Why is the Humm share price slumping 7% on Friday? appeared first on The Motley Fool Australia.

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More reading

• Why did some ASX BNPL shares plummet more than 90% in FY22?
• 5 worst ASX All Ordinaries shares in June
• June was a terrible month for ASX BNPL shares. Here’s why
• Bargains or value traps? Expert rates 3 ASX shares that halved this year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Insurance Australia Group Ltd (ASX: IAG) share price is currently down 1.87% to $4.19 after the insurance giant reported its preliminary FY22 results and revealed guidance for FY23.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.2%.

FY22 result

The prelim results have failed to impress investors, judging by the IAG share price. So let’s have a quick recap of what the company reported.

IAG revealed a reported insurance profit of $586 million, representing a margin of 7.4%, down from 13.5% in FY21, and below the FY22 guidance range of between 10% to 12%.

This included a net perils cost of $1.1 billion, $354 million above the original allowance of $765 million, though it was consistent with the expectations announced in March 2022.

IAG told investors about a reported net profit after tax (NPAT) of $347 million, up from a $427 million loss in FY21.

It included a $200 million pre-tax release from the business interruption provision but also included a “challenging operating environment” with a high incidence of natural perils, volatile investment markets and a higher inflationary environment.

Gross written premium growth was 5.7%, up from 3.8% in FY21.

The full-year announcement will be revealed on 12 August.

FY23 guidance

IAG said that “strong underlying business momentum” is reflected in its guidance for FY23. Expectations about the next 12 months can have an impact on the IAG share price.

Gross written premiums (GWP) are expected to again grow in the “mid to high” single digits, primarily driven by cover claims inflation, higher reinsurance costs, and an increased natural peril allowance. Modest volume growth and an increase in customer numbers are also expected.

The natural peril allowance is increased to $909 million, post quota-share. That’s an increase of around 19% on the FY22 allowance.

IAG share price snapshot

Since the start of 2022, the IAG share price has fallen by 6%.

It is also down by more than 13% over the past year and 2% over the past month.

The post IAG share price drops despite ‘strong momentum’ for FY23 appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets
• IAG share price on watch following FY22 profit of $347m
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• Got $1,000? You can buy 85 Treasury Wine shares… or one bottle of Penfolds Grange!

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Macquarie Group Ltd (ASX: MQG) share price has dropped 16% so far in 2022.

However, interestingly, over the past month, Macquarie shares have risen by 9%. Today, they are up just over 1% at $176.68.

Investors may be getting more confident about the company’s prospects. But is that growing optimism well-founded?

Let’s look at some expert views.

Broker price targets

A price target is the level at which an expert thinks the share price will be in 12 months from the time of that opinion.

As reported by The Australian, the broker Morgan Stanley recently decided to reduce its price target on the business to $218, which implies a possible rise of more than 20%.

The reason for the reduction was that the FY23 first half could be “more challenging” in asset management and investment banking due to the slowdown in economic activity.

However, it predicted that earnings per share (EPS) would fall by 16% on “better commodities, strong long growth, solid demand for infrastructure and renewable energy assets and lower Aussie dollar”. It also made small upgrades to its profit expectations in FY24 and FY25.

Even so, the broker is still ‘overweight’ — which is similar to a buy rating — on the “quality of growth options”.

The Australian reported that the broker believes Macquarie will say the FY23 first quarter is down compared to the strong FY22 first quarter. But, the broker suggested this is priced in with the fall of the Macquarie share price.

After the FY22 result, the broker Morgans upgraded its rating to add with a price target of $215 after a good performance in Macquarie Capital and commodities and global markets (CGM). It increased its earnings expectations for FY23 and said the FY22 result was essentially strong all around.

Macquarie share price valuation

Morgans is expecting more profit from Macquarie than Morgan Stanley. The Morgans profit estimate puts the Macquarie share price at under 16x FY23’s estimated earnings.

Morgan Stanley’s projection for FY23 puts the Macquarie share price at more than 17x FY23’s estimated earnings.

Outlook comments

While warning of a number of potential factors that could impact its FY23 performance, such as market conditions, global inflation and geopolitical events, Macquarie said that it continues to maintain a cautious stance, with a conservative approach to capital, funding and liquidity, which it said positions it well in the current environment.

Macquarie managing director and CEO Shemara Wikramanayake said:

Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets, strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions, an ongoing program to identify cost-saving initiatives and efficiency, a strong and conservative balance sheet, and a proven risk management framework and culture.

Despite all of the volatility over the past year, Macquarie shares are up 12% over the last 12 months.

The post What’s the outlook for the Macquarie share price in FY23? appeared first on The Motley Fool Australia.

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More reading

• Here’s what brokers are saying about the Rio Tinto share price
• Experts name 2 top ASX dividend shares to buy right now
• Top ASX dividend shares to buy in July 2022
• Macquarie shares ‘a clear beneficiary’ of global green energy push: fundie
• Surprise US inflation pumps the brakes on ASX 200 bank shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The market may be edging higher today, but the same cannot be said for the travel sector which has been a sea of red on Friday.

The likes of Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB) have all tumbled lower and are underperforming the market.

Here’s a summary of how they are performing today:

• The Corporate Travel Management share price is down 5%
• The Flight Centre share price is down 3%
• The Qantas share price is down 2%
• The Webjet share price is down 6%

Why are travel shares sinking today?

The catalyst for the weakness in the travel sector today has been the release of a couple of disappointing airline results on Wall Street last night.

Both American Airlines and United Airlines released their quarterly updates and disappointed the market.

While American Airlines delivered its first profit since the pandemic began during the second quarter, its earnings per share were a touch short of consensus estimates.

In addition, capacity concerns overshadowed its return to profit and led to its shares descending deep into the red. Management advised that it expects flight capacity to be between 8% and 10% lower in the third quarter due to higher fuel and labour expenses.

It was a similar story over at United Airlines, which has cut plans to grow flight capacity because of ongoing macroeconomic challenges. In addition, the airline operator’s second-quarter earnings per share fell short of expectations by a wider margin.

This has sparked fears that the travel market recovery may take longer than hoped, which could weigh on the earnings of Flight Centre, Webjet, and other ASX travel shares.

The post Why are Flight Centre, Webjet, and other ASX travel shares sinking today? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets
• UBS tips Qantas share price to surge 40%
• Food, money and travel: 3 ASX shares experts rate as buys right now
• Qantas share price dips amid record delays
• Will the Qantas share price fly higher in FY23?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Global Lithium Resources Ltd (ASX: GL1) are on the move today following the company’s latest drilling results.

At the time of writing, the lithium explorer’s share price is travelling 5.94% higher to $1.16 apiece.

Let’s take a closer look at what the Western Australia-based lithium company announced.

Global Lithium strikes ‘significant lithium bearing pegmatites’

In its release, Global Lithium advised it has received encouraging results from the current drilling program at the Manna Lithium Project.

The site is located 100 kilometres east of Kalgoorlie in the infrastructure rich Goldfields region of Western Australia. Global Lithium holds an 80% interest in the project.

The diamond drilling campaign confirmed that lithium bearing pegmatites extend up to 150 metres down dip past the current resource.

Notably, a hole drilled from the reverse circulation (RC) campaign returned multiple wide lithium-cesium-tantalum (LCT) pegmatite intercepts of more than 10 metres.

The RC program is tasked with drilling the diamond pre-collar holes before moving on to targeting the pegmatite.

Some of the assay results included the following:

• 10 metres at 1.21% lithium oxide (Li2O) from 50 metres
• 12 metres at 1.71% Li2O from 75 metres
• 11 metres at 1.31% Li2O from 225 metres
• 6 metres at 1.26% Li2O from 251 metres

Global Lithium stated that the Manna Lithium Project hosts a maiden Inferred Mineral Resource of 9.9Mt at 1.14% Li2O.

Once the drilling campaign is wrapped up, the company will incorporate the results into an updated Mineral Resource later this year.

What did management say?

Head of geology for Global Lithium, Stuart Peterson commented:

It’s very encouraging to see these great results at such an early stage of the drilling program and they further cement the Company’s decision to acquire an 80% interest in the Manna Lithium Project.

The addition of the double shift for the Mt Magnet diamond drilling crew will speed up the flow of results from this program and enable early planning for the upcoming metallurgical test work. Further deeper diamond drilling will allow the Lithium bearing pegmatites to be targeted to a depth that has never been reached before at Manna, and potentially add critical mass to the size of the deposit which is due to be updated later this year.

Global Lithium share price snapshot

The Global Lithium share price has fallen almost 60% since reaching its all-time high of $2.79 in April.

However, despite being down in the short term, the share is up 340% since its listing in May 2021.

Global Lithium presides a market capitalisation of roughly $173.77 million.

The post ‘Great results’: Here’s why the Global Lithium share price is leaping 6% today appeared first on The Motley Fool Australia.

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More reading

• These 2 ASX lithium stocks are charging up on Tuesday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This week is proving to be monumental for the Zip Co Ltd (ASX: ZIP) share price. The S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) favourite is racing towards the finish line in a blur of green.

At the time of writing, the Zip share price is 90.5 cents. That’s 17% higher than its previous close and 59% higher than it was at the end of last week.

For context, the ASX 200 has fallen 0.04% today and is currently 2.8% higher than it was at last Friday’s close.

Let’s take a closer look at what’s been going on with the ASX BNPL share this week.

Why has the Zip share price rocketed 59% this week?

The Zip share price is leaping higher on Friday, topping off an incredible week’s trade. There has only been one announcement from the BNPL stock this week, and boy did it get the market in a spin.

Zip released its results for the final quarter of financial year 2022 yesterday, detailing a 27% jump in quarterly revenue compared to the prior corresponding period.

The company’s quarterly transaction numbers also lifted 37% year-on-year, while its bad debts in Australia and New Zealand increased 42 basis points quarter-on-quarter.

Interestingly, Zip co-founder and CEO Larry Diamond said the company’s decision to scrap its planned merger with Sezzle Inc (ASX: SZL) earlier this month will see it reach profitability earlier.

The Zip share price gained 13% amid anticipation of the results on Wednesday and launched 17% following their release on Thursday. Thus, today’s gains might be yet another reaction to the company’s quarterly results.

The post Up 59% this week: Why is the Zip share price surging another 17% today? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets
• Why Kelsian, Link, Liontown, and Zip shares are racing higher
• ASX 200 midday update: ANZ’s capital raising, Link jumps, Zip’s Q4 update
• Zip share price up 5% following Q4 update
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Today marks a bittersweet farewell to Uniti Group Ltd (ASX: UWL) shares and their inclusion in the S&P/ASX 200 Index (ASX: XJO). Likewise, shares in the telecommunications company have been suspended from quotation.

For those keeping tabs, the closing of Uniti’s chapter as an ASX-listed company comes four months and seven days from confirming exclusive discussions with Morrison & Co.

The official sayonara follows the Federal Court’s approval of the scheme of arrangement.

What does it all mean?

After hovering between $4.90 and $4.99 per share on the ASX, Uniti has finally ticked the last box to be acquired by MBC BidCo Pty Ltd.

The consortium comprising Morrison & Co, Commonwealth Superannuation Corporation, and BIF IV One Holdings (a Brookfield entity), will be cheering today as the deal to acquire Uniti becomes legally effective.

According to the release, Uniti shareholders will be entitled to a total cash consideration of $5.00 per share on Thursday 28 July 2022. Importantly, this will be comprised of two parts: one is a cash payment of $4.895 per Uniti share, the other being a 10.5 cents per share dividend.

Furthermore, the scheme record date will take place on 28 July, shortly followed by the implementation date on 4 August. This second date marks the time in which shareholders can expect to receive their two-part payment.

Uniti shares’ successful ASX stint

While Uniti might be saying goodbye to the ASX, it leaves behind a short history of immense value creation.

Notably, since commencing its listed life 3 and a half years ago, the Uniti share price has ascended 2,672%. That represents a remarkable compound annual growth rate (CAGR) of 163%.

This clinical demonstration of shareholder value creation was defined by a series of highly successful acquisitions. During its short listed-life, Uniti Group acquired several earnings accretive telecommunications companies, including:

• Pivit Pty Ltd – April 2019
• Fone Dynamics – May 2019
• Call Dynamics – May 2019
• LBNCo Pty Ltd – August 2019
• OPENetworks – October 2019
• 1300 Australia – December 2019
• OptiComm – June 2020
• Harbour ISP – November 2020
• Telstra Velocity – December 2020

In turn, Uniti grew its 12-month trailing revenue from $5.48 million to $214.77 million between 2018 and today. Similarly, profits evolved from $9.92 million in losses to $54.59 million in positive earnings over the same time.

Finally, Uniti shares are up 44% compared to where they were a year ago.

The post ASX 200 officially says goodbye to Uniti shares appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets
• Coronado share price tumbles 8% despite record quarterly revenue
• Did Elon Musk’s comments support or hurt meme tokens?
• What’s going on with the Pure Hydrogen share price on Friday?
• What’s the outlook for Immutep shares in FY23?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) has bounced back from a poor start and is trading broadly flat. The benchmark index is currently trading at 6,793.2 points.

Here’s what is happening on the ASX 200 today:

Brickworks record property earnings

The Brickworks Limited (ASX: BKW) share price is pushing higher today. This morning the building products company announced the launch of the Brickworks Manufacturing Trust and provided a trading update. The latter revealed that it expects to report record Property earnings and strong earnings growth from its Building Products operations in both Australia and North America.

IAG update disappoints

The Insurance Australia Group Ltd (ASX: IAG) share price is falling on Friday after the insurance giant’s preliminary full-year results disappointed. IAG revealed that it expects to deliver a reported insurance profit of $586 million. This reflects an insurance profit margin of 7.4%, which is down 6.1 percentage points year on year and short of its 10% to 12% guidance. Management blamed this largely on its net natural peril costs of $1,119 million, which were $354 million above the original allowance of $765 million.

Travel shares tumble

One area of the market that is well and truly out of form on Friday is the travel sector. The shares of Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB) are falling particularly heavily today along with other travel shares. This follows a poor night of trade for travel stocks on Wall Street after disappointing results from two major airlines.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Zip Co Ltd (ASX: ZIP) share price with a 17% gain. This morning Ord Minnett put an accumulate rating and 90 cents price target on its shares. Going the other way, the worst performer has been the Coronado Global Resources Inc (ASX: CRN) share price with a 7% decline. This follows the coal miner’s quarterly update.

The post ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets appeared first on The Motley Fool Australia.

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More reading

• Coronado share price tumbles 8% despite record quarterly revenue
• Brickworks share price higher on record earnings, Goodman deal
• IAG share price on watch following FY22 profit of $347m
• Food, money and travel: 3 ASX shares experts rate as buys right now
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Brickworks and Insurance Australia Group Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Coronado Global Resources Inc (ASX: CRN) share price is plummeting on Friday after the company posted record revenue for the June quarter despite sliding coal sales.

The coal producer’s shares are currently swapping hands for $1.48, 7.5% lower than their previous close.

Coronado share price plummets alongside sales and production

Here are the key takeaways from the coal producer’s June quarter:

• Record revenue of around US$1 billion – 9% higher than that of the March quarter
• Revenue for the first half came to around US$2 billion – a 147% increase on the first half of 2021
• Record realised meteorological coal price of US$321.20 per tonne – a 20.5% quarter-on-quarter increase
• Run of mine production slipped 18% last quarter to 5.5 million tonnes
• Saleable production fell 22.5% quarter-on-quarter to 3.3 million tonnes
• Sale volumes slipped 9.9% quarter-on-quarter to 3.9 million tonnes

The quarter saw Coronado post record quarterly and half-year revenue despite falling production and sales volumes.

Its average mining costs for the first half came to US$85.20 per tonne sold. That was driven higher by inflation and wet weather.

The company held US$171 million of net cash as of 30 June.

What else happened in the quarter?

The June quarter was a mixed one for the Coronado share price. It slumped 17% over the three months despite hitting a multi-year high of $2.49 in April.

Last quarter saw the company added to the S&P/ASX 200 Index (ASX: XJO) following the removal of Crown Resorts Ltd (ASX: CWN).

Coronado was also hit by a Queensland Government decision to increase coal royalties in late June. The company said it was “disappointed” by the state’s move.

It estimates the royalty rate for its Curragh mine, assuming a realised coal price of US$250 per tonne, would be around 20% under the new structure. Previously, it would have been around 12%.

What did management say?

Coronado CEO Gerry Spindler commented on the results, saying:

Coronado completed the first half of 2022, achieving a number of significant milestones.

These considerable achievements were produced despite headwinds in the form of significant wet weather events in Queensland and growing global inflationary cost pressures.

As the business enters the second half of 2022, I remain extremely confident in our ability to weather these headwinds.

What’s next?

Coronado also updated its guidance for the second half, a move that’s also likely dragging on its share price.

It increased its expected full-year average mining costs by US$10 to between US$79 and $89 per tonne. However, it forecasts its mining costs will drop in the second half.

It also expects its full-year saleable production to come in at the lower end of its guidance range of between 18 million and 19 million tonnes.

Finally, the company believes Queensland’s newly changed royalty arrangement will dint its post-tax earnings by around US$50 million, based on current spot prices.

It has a far more positive outlook for coal prices, however. While meteorological coal prices have dampened on improving supply, lessening demand, inflationary expectations, and COVID-19 lockdowns in China, the company believes they’ll stay above historical averages for the rest of 2022. It also expects strong price realisations in the September quarter.  

Coronado share price snapshot

Today’s fall included, the Coronado share price is 15% higher than at the start of 2022.

It has also gained 48% since this time last year.

The post Coronado share price tumbles 8% despite record quarterly revenue appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Today, cryptocurrency investors are seeing some consolidation following a rally this week that brought the crypto sector above the important $1 trillion valuation mark. With the overall market down 5.5% over the past 24 hours as of this morning’s session, it’s clear some profit taking is in order after a rather rosy start to this week.

However, for meme token investors, today’s decline has been much more steep. Shiba Inu (CRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE), two of the most prominent meme tokens, dropped 10.1% and 8.5%, respectively, over the past 24 hours as of 10:45 a.m. ET. Other meme tokens that have gained in popularity with investors of late, such as ApeCoin (CRYPTO: APE) and STEPN (CRYPTO: GMT), also saw double-digit declines over the same time frame. 

Accordingly, many investors may be asking, “What gives?”

Well, today’s decline actually began yesterday afternoon, following a rather interesting Tesla (NASDAQ: TSLA) earnings call. CEO Elon Musk noted he sold 75% of his Bitcoin (CRYPTO: BTC) holdings over the past quarter, in a bid to boost the company’s liquidity in the face of supply chain issues and other macro factors. While Musk also reiterated his support for Bitcoin over the long term on the call, suggesting he may add to his position in the future, the electric vehicle maker did previously retract the ability for the token to be used as payment for Tesla vehicles following a short-lived experiment.

Musk also stated that Tesla hasn’t sold any of the Dogecoin it holds. How much is held, and whether this token will be used for anything other than merchandise sales in the future, remains uncertain.

So what

Musk’s massive Bitcoin divestiture sent a pretty strong signal to the market that Tesla’s view of Bitcoin as a long-term investment has shifted. In a tweet he sent in May of last year, he noted, “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.” As with anything Musk says, investors who didn’t take these comments with a (big) grain of salt have been disappointed.

That said, his apparent support for Dogecoin (relative to Bitcoin) is notable. In previous interviews, Musk has indicated that his support for meme coins has been driven by a feeling that he’s helping out smaller investors by remaining bullish. Whether that’s an indication this bullish stance will hold forever or — like his views on Bitcoin — is a moving target remains to be seen. 

Today’s price action among most cryptocurrencies, and especially meme tokens, suggests the market isn’t buying any of it.

Now what

The fact that a single man can have such an impact on a $1 trillion sector is rather incredible. Investors considering any of these highly volatile digital tokens ought to consider that reality before jumping in. Indeed, Musk’s unpredictable nature adds to the potential volatility these tokens could see moving forward. 

Given where we’re at in the market cycle, and the macro headwinds that remain, today’s sell-off appears to be warranted. I’m sure meme token investors will be watching how Musk pivots from here. If one thing is certain, it’s that nothing is a sure thing in the world of memes. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Did Elon Musk’s comments support or hurt meme tokens? appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin, Ethereum, and Dogecoin are falling today
• Does this crypto rally have legs?
• Here’s why the Bitcoin and Dogecoin prices are rocketing
• Shiba Inu, Dogecoin, Solana surge higher: Where are meme coins headed from here?
• What’s going on with the Dogecoin price?

Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Tesla. The Motley Fool Australia o0wns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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