Tech Today: Spotify's Curious Listing, Sky's Not Falling on Tesla

Here are some things going on today in your world of tech:

Shares of Spotify (SPOT) are about to go live on New York Stock Exchange via direct listing, perhaps as soon as 11 a.m., is the latest word on the Street. It had been thought because of the unusual nature — the investment banks are not actually managing the offering, there’s no set price range, and the company itself is not offering shares in the deal — it might open up later in the day, but apparently that’s no longer the case.

The stock had already gotten three initiations of coverage last week, placing the valuation in a range of $160 to $220. My colleague Alex Eule had some extra points about the valuation.

But today the stock’s gotten another two initiations of coverage, from Gabelli and Guggenheim with Gabelli giving it a Hold rating, and a $130 price target, and Guggenheim starting it at Buy and a $175 price target.

Tesla’s jumps after missing target

Shares of Tesla (TSLA) continue their pre-market rise, albeit a little less enthusiastic, rising $8.17, or 3%, to $260.41, even though the company said this morning it made 2,020 of its “Model 3” sedan in the last seven days of Q1, below a target it set for itself of 2,500. The company, however, indicated it is feeling good about getting near its target of 5,000 per week for this quarter, and reiterated its contention it doesn’t need to raise capital this year.

One early review comes from KeyBanc’s Brad Erickson, who reiterates a Sector Weight rating, writing that 2,020 is better than many expected despite being below the target. The question will be whether the company will make it to that next milestone of 5,000 per week.

R.W. Baird’s Ben Kallo, who has an Outperform rating, writes that the statement by the company that it won’t need fresh capital is important to refute a bear argument, because it suggests the company can get better margins and better cash flow with rising Model 3 production. In all, the news is “good enough,” concludes Kallo.

Apple rumor doesn’t dent Intel

The Street is mulling the rumor yesterday from Bloomberg that Apple (AAPL) will dump Intel (INTC) chips from its Mac computers come 2020.

Intel shares today are defying the negative speculation, rising by 56 cents, or 1%, to $49.48, and the consensus seems to be losing Apple’s business would be not a big deal for the company.

As I noted yesterday, people are stepping up to defend Intel.

Credit Suisse’s John Pitzer, tilting his report “The Sky is Falling…Again,” he points to Bloomberg’s last article on the matter, back in 2012. This latest version has more specificity, he notes, giving it greater credibility. Still, he questions the real appeal for Apple of ditching Intel.

“A unified OS seems tertiary,” writes Pitzer, "as apps have become more form-factor specific, it would likely open up the risk of performance/compatibility issues, and a move down with a lower cost solution seems antithetical to AAPL’s ‘premium' strategy."

A new approach to equity research

If you have a moment, check out my interview with Pierre Ferragu, formerly of Bernstein, who is joining the boutique New Street Research as a managing partner. The firm, unattached to trading, can bring a fresh perspective to tech research, contends Ferragu. He has some intriguing thoughts on how to look at names such as Tesla across the traditional coverage boundaries that hamper sell-side research.

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Read Again https://www.barrons.com/articles/tech-trader-spotifys-strange-listing-tesla-rising-skys-not-falling-on-tesla-1522768680

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