Tesla Braces for ‘Rough’ Quarters, UnitedHealth Falls, Chipotle Tumbles
On this edition of Stock Movers:
- Tesla (TSLA) shares are tumbling after the company reported a second straight quarter of declining auto sales. CEO Elon Musk warned of difficult times ahead for Tesla Inc. following one of the carmaker’s worst stretches since it first started producing electric sedans over a dozen years ago. Tesla will be in a transition period for the next year or more, losing electric vehicle incentives in the US and needing time to roll out autonomous vehicles, the chief executive officer said. "We probably could have a few rough quarters,” Musk said. “But once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I would be surprised if Tesla’s economics are not very compelling.” Tesla shares fell as Musk spoke after the close of US trading. The move carried over into Thursday, with the stock dropping as much as 9.5% shortly after the open.
- UnitedHealth Group Inc. (UNH) shares fell after the insurance giant is responding to criminal and civil requests from the US Department of Justice about its Medicare practices, the company said, confirming reports of probes that have added to mounting challenges for the largest US health insurer. The company is cooperating with the department and has “full confidence” in its practices, UnitedHealth said in a filing Thursday. The company contacted the Justice Department after reports of the investigations surfaced in the media, and received the requests after reaching out, the company said. “The company has a long record of responsible conduct and effective compliance,” UnitedHealth said in the filing. Shares fell 3.3% at the start of regular trading in New York on Thursday.
- Chipotle Mexican Grill Inc. (CMG) shares plunged after the restaurant chain is cutting its annual outlook for the second time this year, suggesting that honey chicken and burrito giveaways haven’t been enough to offset a traffic slump that the company attributed to economic anxiety. Sales at established restaurants are now expected to be about flat for the full year, the company said Wednesday. It previously forecast the metric would expand by a low-single digit. The shares tumbled as much as 14% in New York, their biggest intraday drop since March 2020. The stock was down 12% this year through Wednesday’s close, among the worst performers in US restaurants.
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