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Today in the Market (12/12/2023)

Good Evening! On Tuesday, U.S. markets ended the day with significant gains, as crucial inflation data indicated that prices were relatively stable before the Federal Reserve’s last policy meeting in 2023.

The S&P 500 and Dow Jones almost ended in the same spot, up 0.46% & 0.48%, while the Nasdaq posted more gains, ending the day 0.70% above opening. 

MATCHING PRODUCTION

A slowdown is coming for the Ford (F) F-150 Lightning EV pickup… but let’s back up. In June, Ford planned to produce 150,000 F-150 Lightning at its Rouge EV facility in Dearborn, Mich., the plant’s installed capacity, or 3,200 per week. According to a document that Automotive News obtained, Ford has informed its F-150 Lightning suppliers that it intends to reduce production to 1,600 Lightning per week, which is half of the initial goal.

So why is this happening? The company stated it was “matching production to customer demand.” Customers no longer want to pay more for EVs than gas-powered automobiles and incur greater borrowing expenses than a few years ago. For example, a standard XL SuperCrew F-150 gas-powered truck costs $40,780, while the Lightning Pro costs $49,995 (before tax incentives).

Also, there is more competition! Tesla’s recent start of deliveries of the Cybertruck, Rivian’s successful sales of its R1 EV adventure vehicles, and GM’s impending entry into the competition next year with its Silverado EV pickups are all signs that competition in the electric truck market is intensifying.

LET'S SIMPLIFY THIS

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Sirius (SIRI) and its principal stakeholders, Liberty Media (LSXMA, LSXMB, and LSXMK),  have entered into binding agreements to merge and form a new company that will be publicly listed. The combined entity will be identified as SiriusXM.

Why are they merging? There has been a longstanding complexity to Liberty Media’s ownership arrangements, so every effort to simplify Sirius’ ownership structure is highly appreciated. However, this does not guarantee that it will become effortless and straightforward, but at least easier to understand going forward.

What will it look like going forward? The revamped Sirius will issue a single series of common shares, which is anticipated to be traded under the existing ticker symbol of SIRI. Overall, the future corporation will have a total of around 3.4 billion shares outstanding, and Sirius and Liberty Media have announced that the investors in Liberty Media will own about 81% of the firm.

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