Tesla, B. Riley, CrowdStrike: Trending Stocks

Tesla (TSLA) adds a new clause in its Cybertruck's terms of service restricting customers from reselling the long-awaited EV within the first year of owning it. B. Riley Financial (RILY) shares tumble after S&P Global Ratings downgrade Franchise Group, the owner of chains like The Vitamin Shoppe, which B. Riley holds a stake in.

Lastly, CrowdStrike (CRWD) stock rises after an upgrade from Stifel analysts to "Buy."

Yahoo Finance Live takes a closer look at several trending stocks after Monday's closing bell.

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

Video Transcript

- We start with Tesla. The EV maker adding the clause in its terms of service for those looking to buy a cybertruck. In this contract, owners would not be-- not be able to sell or attempt to sell the truck within the first year of its delivery. Shares of Tesla are higher today. Unclear if this is exactly why the shares are higher.

But basically what they're saying is, if you buy a Tesla cybertruck, and in the first year you try to turn around and resell it, not back to the company but to somebody else, that they can try and claw back-- sue you and claw back what you get. The profit from that.

- And yet I don't think die hards are going to be frustrated by that at all. I'm just very curious how this truck is received. Because it's so-- listen, it was designed to look different and it is different. It has a sort of triangular look. It's got going-- I'm very curious.

Also, remember, what Musk said about-- and listen. Certainly, investors are excited, we've heard from financial analysts on this show. Julie, they're excited. Dan Ives, he's bowled up on the truck.

But it was-- remember what Musk said on the last earnings call. He said, I think this is our best product ever. Talking about the truck. You know, of course, ever. Musk ever the salesman. It's going to require immense work though, he said, to reach volume production and be cash flow positive at a price point that people can afford.

So in some ways, also maybe kind of downplaying expectations. They're tempering expectations too.

- OK. All of that is true. But why would they do this, right? Why would they say you cannot turn around and sell this in the first year? There are a couple of reasons why, if you think about other products that you are not allowed to resell.

Maybe you bought it in the first place in order to resell it for a profit, and Tesla wants to capture all of that profit. It doesn't want-- I almost think of ticket scalping, right. Someone buys a ticket that is in high demand in order to resell it. The original company, Ticketmaster, Live Nation, what have you, doesn't want a third-party to capture any of that profit. They want the profit.

- Right.

- So is that what's going on here? Is it that-- is there some sort of lack of confidence in the truck? It doesn't seem like it would be fast.

- I'm wondering if-- do other car makers do something similar? Did I maybe sign something, when I bought cars in the past and I probably didn't-- I definitely did not read all the fine print, maybe I signed something kind of similar. I'm not sure.

- I would have to doubt it but who knows? We need a lawyer on this.

- We need a good car guy.

- Or both.

- Yeah.

- If we can find them.

- Moving on. Shares of B. Riley, let's look at this one. Financial continue to dive after S&P global ratings downgrades Franchise Group. Now, that's a company which B Riley led financing for, a management buyout of that firm.

So this one is interesting. It's a bit messy. But here's reading reports, really, what I can gather. That S&P downgrades franchise group. And remember, Riley purchased a stake in Franchise Group. The company-- that's the company behind brands like Vitamin Shop, for example.

So S&P reduces franchise group's credit rating deeper into junk territory. And they talked about weaker revenue, Q3 operating loss, high leverage among other issues. And B. Riley, of course, took that roughly 30% equity interest in freedom VCM Holdings, which is the indirect parent, from what I understand, of Franchise Group. And that's what-- that's what we're seeing the reaction here.

- Yes. We are also seeing the reaction because of this company, Franchises Group-- Franchise Group's association with a gentleman named Brian Conn, who's the CEO of the company. Brian Conn also is involved in a company called Prophecy Asset Management. And the founder of that firm admitted to defrauding clients of $294 million.

Now, B. Riley also reported earnings last week. And in the earnings call, the head of the company said Brian Conn didn't have anything to do with this and this is not-- you know, basically said that this guy was not involved in fraud.

- Right.

- But because, as you said, this is a messy situation. So investors seem to be concerned. Whether that concern is valid, the company is saying it is not.

But not only is the stock down sharply today, it fell 15% on Friday. And B. Riley shares are now down more than 50% since last Monday alone. So there's just a lot sort of swirling around this. And the company has not yet successfully gotten in front of that selling.

- Not yet.

- Yeah. All right, we got one more to tell you about. That is Stifel crowdstrike, I should say. Stifel upgrading the stock from hold to buy, citing its cloud-based endpoint technology as a differentiator from other companies in the cybersecurity market.

Shares of the company closing higher by about 2.4% in today's session. The price target on that going to 225 from 153. So a pretty substantial upgrade to that price target.

- Yeah. So stifel takes us to buy from hold. They say, listen, it's the leading provider of endpoint security software services. Thinks the company is going to benefit from consolidation they, at least, think's coming. And they think crowdstrike can sustain at least low to mid 20% growth, that's their bogey.

New products, international expansion. As you know, that target goes to 225. Stock is up now about 90% this year. So listen, congrats to you if you've been long this time. 44 buys, five holds, no sells.

- I mean, you could argue this is a little bit of a late upgrade, perhaps.

- Perhaps. We'll find out.

- I guess--

- Average target is 200, by the way.

- Got it.