Various companies have experienced a changing of the guard in leadership in 2023. With 2024 just days away, these companies and fresh CEOs prepare to face new challenges. Three companies in particular are in focus for many investors next year — Morgan Stanley (MS), Starbucks (SBUX), and Tesla (TSLA).
Morgan Stanley will have new leadership in CEO Ted Pick, succeeding James Gorman who will stay on as executive chairman for one year. Pick has been with the company since 1990, starting as an analyst and was involved in capital-raising activities during the 2008 financial crisis.
Starbucks CEO Laxman Narasimhan will face ongoing challenges in handling growing unionization efforts across Starbucks locations nationwide. Ongoing union pushes and calls for boycotts, which have reportedly cost the coffee chain $11 billion in value, will be an uphill battle for Narasimhan.
Lastly, Tesla CEO Elon Musk will be under close watch as multiple headwinds for the company mount including massive recalls, unionization efforts in Europe, and Musk's time spent as leader of multiple companies including the Boring Company and X.com (formerly Twitter).
Yahoo Finance Anchors Brad Smith and Brian Sozzi break down the latest developments with these company leaders and the challenges they will face in 2024.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
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BRAD SMITH: It's been a difficult year for leadership companies as companies grapple with high inflation and shaky economic backdrops. But what can investors expect heading into 2024? Let's start with Ted Pick.
He's going to take the helm at Morgan Stanley on January 1 here. This is one that you've been tracking in this transition here.
BRIAN SOZZI: Yeah. Some of the stories are starting to pop up on Ted Pick. Of course, an announcement was made a couple of weeks ago, really cool, really helpful, I should say, piece by the FT, looking at what some of the challenges that Pick has to confront.
Looking into next year, of course, Ted, coming up, I would say, more through the trading and investment banking side of the business, now Morgan Stanley under outgoing CEO James Gorman, who is staying as executive chairman for one year, he has really positioned Morgan Stanley into wealth management. So I think it's going to be important to see how Pick manages, really, what is now seen as the growth driver inside of Morgan Stanley in wealth management, just given the acquisitions he has made. But, Brad, also let's keep in mind that Pick takes this position.
Morgan Stanley shares are down about 12% since December 8. Really, continue to be under pressure one of the more underperforming stocks in the big banking space, as our very own David Hollerith, our senior banking reporter here has been writing about. So this stock is not doing well.
Some concerns of Pick can be like Gorman, who has really driven, really, a massive turnaround since he took over more than a decade. So it will be interesting to see if he can get through that. And a lot of regulatory issues over at Morgan.
BRAD SMITH: Yeah. And to this point, I mean, you've had a lot of the banking executives have to continue to make trips to Washington DC, discussing what Basel III Endgame could mean for capital requirements here. It'd be interesting to see the tone that Ted Pick needs to strike with a lot of those regulators going into next year as well.
BRIAN SOZZI: All right. Next up-- we have Starbucks with its new CEO Laxman Narasimhan looking to orchestrate a turnaround plan. And Brad, I continue to be very focused on how Lax handles the push to unionize Starbucks stores.
Now, Starbucks, in typical form, has-- I really think has brushed this aside as someone who has covered this company for close to 20 years, first under Howard Schultz. They typically push a lot of these issues to the back burner. They think because they're Starbucks, it's their world, and everybody gets to live in it. It's not working like that, has not worked like this in terms of the Union issue for more than a year.
I think Lax has to finally figure this out. Has to offer potentially some concessions. Because the alternative, as you see on the stock chart, this union issue will continue to weigh on Starbucks shares for the foreseeable future if he does not get out in front of this finally once and for all.
BRAD SMITH: Plus, Internationally, you've got to think about what the expansion plan looks like and what Laxman is going to continue to push for as of right now. I mean, we just came weeks off of what his international scope and what was perhaps defined as a cold brew type of employee memo that he put out from the desk of the CEO. And essentially, looking out at some of the exogenous risks that exist.
Sure, they do exist. But at the end of the day, it's also the mark of a leader in those times, how you're bringing your customers, your employees, the rest of the management team through that, and continuing to grow out the business and the prospects there.
And I think China is one area where investors have continued to ask the question of where will they ensure that they maintain the market share they've developed while also improving the brand sentiment within that particular region as well.
BRIAN SOZZI: I'll just say real quickly here, Brad, before we jump to one other one. I just didn't like that letter from Lax that you mentioned. It looks to be that he wants to continue using that Starbucks blog, like Howard Schultz long did weighing in on social issues.
I think for Lax to turn around investor sentiment, just be a good Starbucks, be a good operator, drive better results, be good to your employees, and let the results speak for themselves. You don't need to hop on to that Starbucks blog and try to be Howard Schultz light.
BRAD SMITH: Yeah, well, yeah, exactly. Howard Schultz, eventually, when he did leave Starbucks eventually, went on to go into politics for a brief stint, and very brief. Also here, we got to finally talk about Elon Musk from X to SpaceX. There's a lot on tap for 2024.
I think investors just want to know what is going to take place in 2024 that Elon Musk just places so much of his time around? Because that's going to have a broader overhang on what the stock actually does, what the margins look like. Is he ready honestly to continue to cut in order to just to get some of the Tesla models into driveways, into garages, into charging stations as well?
Where does the network grow out in terms of the superchargers? Because that is the overhang for the amount of people who are looking to purchase or even finance. So where financing is even, perhaps, rosy, I dare. I say rosy because financing a vehicle, financing anything right now, not the most rosy environment.
But in the event somebody does still enter into a purchase of that vehicle, where do they then look across that network and feel confident? Because that's the hang up for a lot of people that were looking to buy an EV right now. Demand waning, a lot of the vehicle companies have had to pull back on some of their ambitions that they have as well.
BRIAN SOZZI: Among many things I'm watching, Brad, really, is how does Tesla perform potentially in another year where EV prices continue to fall? The used values of Tesla vehicles continue to decline. You also have GM and Ford continuing to roll out large number of EVs in this country and do so very aggressively. So, lots of concerns here, I think, on Tesla after a pretty good year.
