Tesla Remixes The Tune: LiveOne Shares Dip After Partnership Changes And Slashed Revenue Guidance
Portfolio Pulse from Nabaparna Bhattacharya
LiveOne, Inc. (NASDAQ:LVO) shares fell after announcing changes to its partnership with Tesla, Inc. (NASDAQ:TSLA) and lowering its revenue guidance for FY2025. The partnership renewal includes Tesla replacing its streaming button with LiveOne's, but Tesla will stop subsidizing LiveOne products for some customers by Dec 2024. LiveOne revised its revenue guidance to $120M-$135M, down from $140M-$155M, and adjusted EBITDA to $8M-$15M, down from $16M-$20M.
October 01, 2024 | 5:14 pm
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NEUTRAL IMPACT
Tesla's partnership with LiveOne has been renewed, but it will stop subsidizing LiveOne products for some customers by Dec 2024. Tesla will continue to pay LiveOne for grandfathered users.
The news primarily affects LiveOne, with Tesla's role being more passive. The decision to stop subsidies may have a minor impact on Tesla's customer offerings but is unlikely to significantly affect its stock price.
CONFIDENCE 90
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
LiveOne shares dropped 21.4% after announcing changes to its partnership with Tesla and lowering its FY2025 revenue guidance. The company will no longer receive subsidies from Tesla for some customers, impacting future revenue.
The significant drop in LiveOne's share price is directly linked to the announcement of changes in its partnership with Tesla and the reduction in revenue guidance. The end of Tesla's subsidies for some customers is expected to impact LiveOne's revenue, leading to a negative market reaction.
CONFIDENCE 100
IMPORTANCE 90
RELEVANCE 100