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Markets Go Nowhere as BlackBerry Deal Fails and Investors Brace for Tesla Earnings

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

With little economic data, it isn't surprising that the broader markets are nearly unchanged for the session. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down about 11 points as of 11:15 a.m. EST. Microsoft (NASDAQ: MSFT  ) is one of the index's top gainers, up an uninspiring 0.5%. Meanwhile, shares of rival handset-maker BlackBerry (NASDAQ: BBRY  ) are down more than 12%, and Tesla (NASDAQ: TSLA  ) is up more than 3.7% ahead of earnings.

Paul Allen's Vulcan Capital thinks Microsoft should be broken up
Vulcan Capital, the firm that manages Paul Allen's fortune, has said that Microsoft should be broken up. Specifically, Vulcan believes Microsoft should spin off its consumer businesses, including the Xbox video game console. Vulcan's comments wouldn't be that notable -- others have said similar things in the past -- if Allen weren't one of Microsoft's co-founders, which gives them some weight to investors.

Still, just because Vulcan advocates a spin-off doesn't mean it will happen. Allen no longer has any managerial role with Microsoft and reportedly owns just $2 billion worth of stock. With Microsoft on the hunt for a new CEO, anything is possible, but a breakup of the company is far from guaranteed.

BlackBerry's plan to go private falls through
Microsoft's Windows Phone could get a boost from BlackBerry's (NASDAQ: BBRY  ) struggle. Shares of BlackBerry have plunged after the company said the deal to take it private had fallen through. CEO Thorsten Heins is also stepping down.

Fairfax Financial had offered $9 per share to take BlackBerry private but was unable to get together the financing to buy the company. Instead, Fairfax, along with other institutional investors, will invest $1 billion in BlackBerry. That investment is likely blunting what would otherwise be an even sharper drop for Blackberry shareholders.

Still, BlackBerry's recent earnings reports have been disastrous, including a nearly $1 billion loss last quarter. Sales of BlackBerry's BB10 handsets, intended to salvage the company, have been disappointing.

Tesla investors optimistic ahead of earnings
The last few months may have been terrible for BlackBerry shareholders, but they've been great for owners of Tesla shares. In just the last six months, shares of Tesla are up 200%, and they've continued to rally today.

Yet October was a downbeat month for Tesla, with shares shedding about 10% of their value. Two of Tesla's Model S sedans reportedly caught on fire shortly after getting into accidents, raising concerns about the safety of electric cars.

Tesla will report earnings on Tuesday, and analysts are expecting it to show a profit for the quarter. With such a highflying stock, any disappointment could be disastrous for Tesla shareholders, but as Tesla still remains heavily shorted, a surprise to the upside could result in a powerful rally.

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9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
BBRY $7.94 Down -0.39 -4.68%
BlackBerry CAPS Rating: *
MSFT $57.40 Down -0.63 -1.09%
Microsoft CAPS Rating: ****
TSLA $200.70 Down -5.57 -2.70%
Tesla Motors CAPS Rating: **