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The next generation of traders has blown the doors off an elitist Wall Street ritual, with Goldman Sachs (GS), Chevron (CVX) and Tesla (TSLA) all holding glitzy and widely publicized “investor days” this week in place of an intimate conference with shareholders.
While Tesla’s investor day on Wednesday marks the first such presentation for the young company, Tuesday was just the second time in 154 years for Goldman Sachs, and saw executives serving as company showmen, touting their products and accomplishments on jumbo screens and flashy banners.
Ostensibly, they’re selling the vision of their company, building trust and addressing controversies without the cumbersome regulations surrounding annual shareholder meetings. But they’re also bowing to pressure from retail investors to be more transparent.
What’s happening: Investor days evolved from analyst days — meetings that large, public companies historically held privately for their core institutional investors and Wall Street analysts. These meetings allowed executives to hobnob with investors, talk strategy and build connections.
But the recent influx of retail investors into the stock market has changed that. These accountability meetings between huge institutional investors and analysts are rapidly expanding. Goldman Sachs posted the slides from its meeting online and made CEO David Solomon available to the media ahead of Tuesday’s meeting.
Retail investors are pouring a record $1.5 billion per day into the stock market, according to new data from Vanda Research, potentially giving small traders even greater sway over markets than they had at the height of the “meme-stock” mania in 2020. Corporations are paying attention.
Tesla is the investor favorite among this group, with retail inflows to the stock totaling about $10 billion year to date.
“A lot of these companies know they need to focus on retail investors now,” said Katie Perry, general manager of investor relations at investing platform Public. “Investor relations is now more akin to consumer marketing.”
Reddit to research: Meme-stockers are evolving, said Perry, and companies are being forced to adapt. Last year’s bear market didn’t cause meme investors to lose faith. Instead, they became more diligent and interested in company fundamentals.
“The meme revolution is now an evolution,” she said. According to Public data, 63% of their investors have spent more time researching stocks in 2023 than they did at this time last year.
“People are digging in, but there’s a friction where they have trouble getting the information they need,” said Perry. They’re demanding a democratization of investor relations.
They’re not going anywhere, either.
“With recent surveys showing the institutional investor community remaining broadly bearish on stocks, it would be unwise to underestimate the importance of the retail cohort,” strategists at VandaTrack said in a note. “That’s in keeping with retail sales and jobs data for January, suggesting that consumers retain impressive levels of buying power.”
Goldman, Chevron and Tesla: Investor day takeaways
▸ Goldman Sachs shares sank 3.6% on Tuesday following the company’s investor day meeting, when Goldman CEO David Solomon essentially admitted that the bank’s plans to expand its Main Street offerings had failed.
The narrative around Goldman has recently “been clouded by the persistent negative headlines tied to the consumer business (losses, personnel departures, product delays/terminations, regulatory scrutiny) which have given the impression that the Goldman leadership has lost control of delivering on its strategic priorities,” wrote Bank of America analysts in a note on Tuesday.
The consumer strategy unit, known as Platform Solutions, includes credit card partnerships with Apple and General Motors as well as specialty lender GreenSky, which Goldman bought for $2.2 billion in 2021. A January Securities and Exchange Commission filing showed the bank’s consumer unit has lost more than $3 billion since the start of 2020.
Solomon said Tuesday that Goldman Sachs was “considering strategic alternatives,” noting that “we have significantly narrowed our ambitions for our consumer strategy.”
▸ Chevron also made headlines at its investor day, after announcing that it would increase its rate of stock buybacks yet again, even though crude prices have declined by more than 30% since recent high in June. Chevron will repurchase $17.5 billion a year in stock beginning in the second quarter of 2023. That’s 17% higher than the previous target, executives announced.
It’s a bold move, coming after a firm rebuke from President Joe Biden about rewarding shareholders instead of investing in production and green energy.
Chevron attempted to offset some of that criticism by committing to 3% production growth annually.
“We expect to grow profitably in our traditional and low carbon businesses without sacrificing gains, efficiencies or free cash flow,” Chevron’s vice chairman Mark Nelson said at the presentation in New York.
Shares of Chevron fell 1.3% on Tuesday as crude oil prices continued to tumble.
▸ Tesla’s first-ever investor day will be live-streamed Wednesday from its Gigafactory in Austin, Texas. Some shareholders and analysts will also attend the event in person.
Tesla shares notched their worst year ever in 2022, with the stock down more than 65%. The EV-automaker has since rebounded to become the best-performing stock in the S&P 500, and is up nearly 70% year to date.
Mexico’s president, López Obrador, announced on Tuesday that Tesla has committed to building a major plant in northern Mexico, which will likely increase output. Obrador said the company planned to release more details during its presentation on Wednesday.
CEO Elon Musk is likely to announce that his goal for Tesla is to produce 20 million cars a year by 2030. He’s got a long way to go: The automaker only delivered 1.31 million vehicles in 2022. Musk will also likely reveal his “Master Plan 3,” which will attempt to reduce dependency on fossil fuels.
Musk and Tesla have recently come under legal scrutiny. Both Musk and the company were sued on Monday by shareholders who accused them of overstating the effectiveness and safety of their electric vehicles’ Autopilot and Full Self-Driving technologies.
Shares of Tesla fell 0.9% on Tuesday.
Mark Zuckerberg looks to ‘turbocharge’ Meta AI
Facebook hit one million users after 10 months, Instagram achieved that number in 2.5 months. It took ChatGPT five days.
It’s no wonder that Meta CEO Mark Zuckerberg wants in on the raging popularity of AI tools.
Zuckerberg said this week that Meta is creating a new “top-level product group” to “turbocharge” the company’s work on AI tools, as it attempts to keep pace with a renewed AI arms race among Big Tech companies.
In a Facebook post late Monday, Zuckerberg said the elite new group will initially be formed by pulling together teams across the company currently working on generative AI, the technology that underpins the viral AI chatbot, ChatGPT. This group will be “focused on building delightful experiences around this technology into all of our different products,” Zuckerberg said, starting with “creative and expressive tools.”
“Over the longer term, we’ll focus on developing AI personas that can help people in a variety of ways,” Zuckerberg said. Those AI features may include new Instagram filters as well as chat tools in WhatsApp and Messenger, he said.
Microsoft said Tuesday that it will incorporate the tech behind ChatGPT straight into its Windows 11 search bar and Google has unveiled its own AI-powered tool called Bard.