Stellantis lost 4 billion euros in cash in one quarter. The stock jumped 12%.
Read that again. Then close your brokerage app. Then close your laptop. Then reconsider your hobbies.
The company calls this a turnaround. Fine. A man who falls down the stairs only 11 steps instead of 20 is also on a journey of improvement.
Four billion euros is $4.5 billion. That is a lot of money to misplace in 90 days. Most people lose a sock. Stellantis lost a small country's defense budget and got a standing ovation.
The cost cuts are gaining traction, we are told. Traction. On a company that owns Jeep, Ram, Dodge, Chrysler, Fiat, Peugeot and a few other brands your uncle has opinions about. Cutting costs there is like trimming a hedge on a burning house.
Retail traders will see the green candle and call it a reversal. They will draw a little line under it. They will use the word breakout. Some will buy calls with money earmarked for a dental implant.
The chart doesn't know about the cash shortfall. The chart has never driven a Chrysler. The chart is a drawing, and so is your retirement plan.
Maybe the rally holds. Maybe it fades by Friday. Either way, nobody who bought at the top of a 12% pop on a 4 billion euro hole was ever going to be fine.
Buy the stock if you must. Just know the company lost more money this quarter than you will see in your entire life, and still handled it better than you handle a Tuesday.
Photo by on Unsplash
Leave a Comment