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Bitcoin rises, Tesla tumbles, Tapestry earnings: Top movers

Bitcoin (BTC-USD) jumped on a Coindesk report the Securities and Exchange Commission has revived talks with Grayscale about its spot bitcoin ETF. Tesla (TSLA) shares fell more than 6% after HSBC initiated coverage with a "Reduce" rating, citing Elon Musk as a "single-man risk" and long timelines for bets like robots. Tapestry (TPR) reported mixed first quarter results, saying there was "a difficult consumer demand environment" in North America.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: All right, let's take a look at some trending tickers now. First up, Bitcoin renewed optimism about the spot Bitcoin ETF approval driving prices higher. And CoinDesk reported late Wednesday the Securities and Exchange Commission began talks with one applicant, Grayscale Investments.

So this one rally continues here, Akiko. Of course, we're still well below that record high $69,000, that was back in November 2021. Then we had the crash in '22, but we're rallying here.

We're now at the-- we're hitting the highest price here in about 18 months. And Bitcoin fans, we know, would be excited. We've been talking to strategists and different investors. At least the crypto fans, very enthusiastic about the idea that maybe the SEC steps in here and gives that spot Bitcoin ETF the official green light. And their hope is that really sparks and motivates more mainstream acceptance.

AKIKO FUJITA: Yeah, that has long been seen as the next big catalyst for Bitcoin bouncing back off of big lows we saw last year. But still at $36,000, well off this $60,000, near $70,000 highs that we saw in 2021. We should point out, we're also seeing a big rally in Ethereum today.

Asset Management giant BlackRock potentially taking that first step towards an Ether ETF Delaware's division of corporations. The website there showing that there was a registration for iShares Ethereum Trust, so a lot of excitement around there as well. So ETF, crypto certainly seen as another big lever that could potentially be pulled.

JOSH LIPTON: Yeah, I mean, certainly you mentioned BlackRock. It's always interesting, Larry Fink initially a skeptic, now a believer. I don't know. I mean, Larry talked to the right people or did some research, but a change there.

But to your point too, Bitcoin's move today giving a lift to stocks of digital asset companies too. Check out Coinbase. Check out MicroStrategy. Both also well in the green.

AKIKO FUJITA: All right, let's take a look at shares of Tesla under pressure. HSBC initiating coverage on the stock with the equivalent of a sell rating saying the company is overvalued for what it's delivering. The analysts had a $146 price target. That's a decline of more than 30% from these levels.

Now you see the stock down more than 6% right now. Josh, it's not necessarily that HSBC is saying long term this is not a company you want to invest in. It's just when they're talking about what has driven this stock, whether it is the self-driving, whether it is the Dojo supercomputer, all of these are long-term plays for the company and HSBC seeing saying that that's going to take a little longer than expected.

We should point out, they've also highlighted Elon Musk's prominence within the company saying that presents, in their words, a considerable single man risk.

JOSH LIPTON: Yeah, so to your point, Akiko, they talk about uncertainty around the timing and just the commercialization of Tesla's various bets. So robots, autonomous vehicles, energy storage. I think the money quote here is, "We see considerable potential in Tesla's prospects and ideas," they told clients, "but we think the timeline is likely to be longer than the market and valuation is reflecting."

And those comments about Musk were interesting because they said, listen, I think they're saying, listen, he's dynamic, he's charismatic. But they argue that he represents a key man or single man risk, which is interesting because Tesla has tried to kind trot out different executives right expand their profile. But ultimately, when people think Tesla, they still think Musk.

AKIKO FUJITA: A single man risk.

JOSH LIPTON: That's it.

AKIKO FUJITA: That word, how many companies can you say it's just really, really that brand is represented by a single person?

JOSH LIPTON: A lot of people are in the stock because they believe in Musk, right? I mean, they are fans. We've had him here on Yahoo Finance. That's part of the thesis.

All right, moving on to your final stock going to watch here is Tapestry, parent company of Coach, reporting weaker than expected revenues, but adjusted earnings beat stocks higher here after the earnings call. So Tapestry here, owner of coach, also Kate Spade, adjusted EPS, gross margins. That was ahead of consensus, Akiko.

Citi here in a note saying market expectations were pretty low going into the print. So in their opinion, not too high of a hurdle they had to clear. And they go on to say here, they do have a buy actually. They have a target of 48. They say that the margin performance, they think, kind of, offset that slightly weaker than expected revenue.

AKIKO FUJITA: Yeah, the CEO saying, specifically, in these results that as the company moves forward, we're in a position of strength with meaningful runway for sustainable growth. Global growth also always an interesting one to look at with a brand like Tapestry just given just where some of these brands are doing, particularly in a market like China. The company specifically looking at international revenue growth of 7%. A lot of that fueled by gains they saw in Japan, 12% there and 9% in greater China.

JOSH LIPTON: Yeah and the company is in the midst of buying Capri Holdings, so parent to Michael Kors. And they did say the deal is making progress toward a close and some analysts are saying that should ease some uncertainty there as well. Stock has had a rough though 2023. We should note it's still down about 20%, 25%.

AKIKO FUJITA: Yeah, these luxury brands always a good gauge of where the consumer is, so when we're going to continue to watch.