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Tag: company activities and management

  • After a steep fall, used car prices poised to rise again | CNN Business

    After a steep fall, used car prices poised to rise again | CNN Business

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    New York
    CNN
     — 

    The price of used cars has been falling steadily, and steeply, for much of the last year. Unfortunately for car buyers, that could be about to change.

    Wholesale prices for used cars being sold at auction have risen sharply in the last few weeks, according to industry data. Higher retail prices on used car dealer lots are likely to be close behind.

    According to data from Manheim, the largest wholesale automotive marketplace, prices jumped 4% in just the last two weeks, an unusually large increase in such a short time period. While many in the industry expected the drop in prices wouldn’t last, the sudden increase caught many by surprise.

    “We did not anticipate that prices would jump as much as they have,” said Chris Frey, senior industry insights manager at Cox Automotive, which owns Manheim. “It made my eyes jump out.”

    Dealers started pulling back on their inventory of used cars as prices were declining late last year and into January. Much of the decline began late last year as a larger supply of new cars became available for purchase.

    A shortage of parts, particularly computer chips, caused automakers to scale their production back far below the demand for new vehicles, and push potential new car buyers, even rental car companies, into the used car market. That shortage of new car inventory helped drive both new and use car prices to record levels earlier last year.

    But part supplies and computer chip inventory improved in the last half of 2022, and with that used car prices started to decline. In January used car prices were down 11.6% from the year earlier, according to the Consumer Price Index, the government’s key inflation reading – the biggest 12-month decline since the depths of the Great Recession in early 2009.

    The busy selling season for used cars is only months away — it’s tied to when potential buyers get their tax refunds. Now dealers are scrambling to rebuild inventories, and that is driving up prices.

    The strong labor market, with employers unexpectedly adding more than 500,000 jobs in January, is also driving demand for used cars.

    “If you want to point at one factor that drives demand for cars, it’s jobs,” said Ivan Drury, director of insights at Edmunds. “If you’ve got a job, you’ve got a car.”

    Part of the problem in the months ahead can be traced to the early days of the pandemic three years ago. The disruptions to the new car market at that time are about to be felt by today’s used car market.

    In March and April of 2020, auto plants across the nation were shut by stay-at-home orders, and many dealerships were closed. Demand for cars also fell off a cliff amid record job losses and millions of additional workers shifted to working from home rather than commuting.

    So the 2020 plunge in car sales meant that few people were signing up for three-year leases on new vehicles, contracts that would normally be coming to an end now and in turn feed those vehicles into the supply of used cars on the markets.

    “The repercussions of the pandemic are coming through,” Drury said. “The supply is definitely not going to be there.” The disruptions in the car markets in 2020 and early 2021 could affect used car prices much of the year.

    “We are entering a period of tight supply on 3- and 4-year-old vehicles, which make up the majority of [used] car sales,” said Michael Manley, CEO of AutoNation

    (AN)    , the nation’s largest car dealership, in a call with investors Friday. “And that’s going to impact wholesale prices and ultimately, retail prices.”

    It’s tough to know how long the rise in used car prices will last.

    The labor market and consumer spending is strong at the moment, but there are still worries about a possible recession. The Federal Reserve appears likely to keep raising interest rates, at least in the near term, which in turn will raise the cost of car loans, and for the financing that car dealers use when purchasing their own inventories.

    The drop in used car prices has been a major factor in the slowing of inflation, but a sustained rise in used car prices could make it more difficult for the Fed to pull back on rate hikes.

    Overall prices are up 6.4% over the last 12 months, according to CPI, but that reading has fallen for seven straight months. And prices would have risen 6.9% over the same 12 month period if used car prices had posted such a steep decline and instead just stayed unchanged.

    So broader economic conditions in the US economy are certain to have an effect on supply, demand and pricing of used cars, which makes forecasting future prices very difficult, said Frey.

    “I don’t think this latest increase is a blip. But I imagine prices could come down after spring and tax refunds land,” said Frey. But he added that forecasts are tough to make in the current market.

    “We’ve been calling for a 4% decline in prices from December last year to December this year,” Frey said. “We may have to revise that.”

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  • Amazon’s Zoox robotaxi drives on public roads in California for the first time | CNN Business

    Amazon’s Zoox robotaxi drives on public roads in California for the first time | CNN Business

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    London
    CNN
     — 

    Amazon’s Zoox driverless transportation company has started testing its robotaxi on open public roads — with employees on board, for now.

    The company said Monday that it conducted an initial run of its shuttle service for workers at its headquarters in Foster City, California on February 11, a key step in its efforts to make autonomous vehicles widely available.

    “With the announcement of the maiden run of our autonomous employee shuttle, we are adding to the progress this industry has seen over the last year and bringing Zoox one step closer to a commercialized purpose-built robotaxi service for the general public,” Zoox CEO Aicha Evans said in a statement.

    Full-time employees will now be able to travel in the self-driving taxi on the route between Zoox’s two main office buildings. The vehicle can carry as many as four people at a time and drive at speeds of up to 35 miles per hour.

    The startup said its robotaxi — which underwent “rigorous” testing on private roads and has received necessary approvals from the California Department of Motor Vehicles — can handle left- and right-hand turns, traffic lights, pedestrians, vehicles and other potential obstacles on the journey.

    Zoox, which was founded in 2014 and purchased by Amazon in 2020, is unique in its approach to designing electric self-driving vehicles.

    Most autonomous cars under development resemble those currently on the road. But Zoox has ditched the steering wheel and brake pedal, claiming those features are unnecessary when there’s no human driver. Seats are designed to face each other to facilitate conversation between passengers.

    Google, General Motors and other tech and transportation companies have poured billions of dollars into self-driving vehicles for more than a decade with the promise that they would deliver improved safety and convenience for riders. Yet some evangelists have abandoned their efforts in recent months, with high costs and elusive profits becoming harder to stomach as the economy slows.

    In October, Ford and Volkswagen, two of the world’s largest automakers, shut down joint efforts to develop self-driving taxis through a venture called Argo AI.

    Ford CEO Jim Farley said at the time that he’s still “optimistic” about a future for fully self-driving cars, “but profitable, fully autonomous vehicles at scale are a long way off.” The company wouldn’t necessarily have to create the technology itself, he added.

    — Matt McFarland contributed reporting.

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  • Twitter is stumbling. Some ex-employees are launching rivals | CNN Business

    Twitter is stumbling. Some ex-employees are launching rivals | CNN Business

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    New York
    CNN
     — 

    After Sarah Oh lost her job as a human rights advisor at Twitter late last year in the first round of layoffs following Elon Musk’s chaotic acquisition of the company, she decided to join a friend in building a rival service.

    With Gabor Cselle, who previously worked at Twitter and Google, she launched T2, currently available in beta. Like Twitter, it offers a social feed of posts with 280-character limits. But the key selling point, according to Oh, is its focus on safety.

    “We really do want to create an experience that allows people to share what they want to share without fearing risk of things like abuse and harassment, and we feel like we’re really well positioned to deliver on that,” Oh told CNN.

    In the months since Musk completed his takeover, a small but growing number of services have launched or gained traction by appealing to users who are uncomfortable with the billionaire’s decisions to slash Twitter’s staff, rethink content moderation policies and reinstate numerous incendiary accounts that were previously banned, among other moves.

    The list of newer entrants in the markets includes apps like T2 and Spill created by former Twitter employees, a startup backed by one of Musk’s Twitter investors, and a service from former Twitter CEO Jack Dorsey. While some apps like T2 strongly resemble Twitter, others take a different approach.

    Last month, for example, the founders of Instagram announced Artifact, “a personalized news feed” powered by artificial intelligence, a description that quickly earned it comparisons to Twitter. In CNN’s recent test of the app, however, it resembled news reader applications like Apple News or the defunct Google Reader. Artifact displayed popular articles from large media organizations and smaller bloggers in a main feed, tailored to users based on their activity and selected interests.

    But all of these apps appear to be vying for the opportunity to scratch the itch users may feel for a news feed that isn’t Twitter — at least for as long as that itch lasts.

    “Something that we’ve heard a lot from people who are moving over from Twitter, either partially or fully, is that it is just for them a nicer experience overall,” said Jae Kaplan, co-founder of Anti Software Software club, the group that develops Cohost, a text-based social media feed similar to Twitter. The service launched publicly in June of last year, after Musk offered to buy Twitter. In November, after Musk completed the takeover, the platform saw a surge in activity, adding 80,000 users within 48 hours.

    “People have been referring to us when they do as a Twitter alternative, which I think is an important distinction from a Twitter replacement,” Kaplan said.

    Replacing Twitter, with its robust network of journalists, politicians and entertainers and sizable audience of users obsessed with real-time news, may be a challenge. While apps like Cohost have seen renewed momentum, their audiences remain a small fraction of the size of Twitter, which had more than 200 million daily active users as of last year.

    Cohost currently has 130,000 users, only 20,000 of which are what Cohost considers active users, according to Kaplan. T2 has a waitlist in the five digits, according to Oh, who says that number continues to grow. Mastodon, the most high-profile recent Twitter rival, hit 2.5 million users in November, but it has since declined to 1.4 million users, in a possible cautionary tale to other services.

    “The incumbent has the advantage of scale, and even in a situation where you have kind of a polarizing figure like Musk take over Twitter, people are realizing that the newer platforms are not nearly as effective from a one-to-many, getting your message out there,” said Tom Forte, a senior research analyst at D.A. Davidson. “Despite the fact that there may be disgruntled consumers, they’re still tweeting.”

    In November, shortly after taking over the company, Musk repeatedly claimed Twitter continued to hit “all-time high” user numbers despite the initial wave of users calling to abandon the social network. (As part of the acquisition, Musk took Twitter private and the company no longer reports user numbers in quarterly securities filings.)

    “If people leave, where do they go? By all accounts, there is no platform right now that is able to take on the function of Twitter, and nothing is really prepared for it,” said Karen North, a clinical professor at the USC Annenberg School for Communication and Journalism. “No platform has the global user base, representing people from all walks of life the way that Twitter does.”

    To complicate matters for rivals, some of the initial fury and media attention about Twitter under Musk has arguably faded in the months since the deal closed. Though controversy remains, many Twitter users may feel less urgency to jump ship today than in late October.

    Still, Mastodon founder Eugen Rochko is not worried.

    “A platform cannot continue to go viral perpetually,” Rochko recently told CNN about Mastodon’s sagging user numbers. “The cycle of media news and attention on social media just simply goes away after awhile, but behind it leaves organic growth which is what we had before November and which we still have now.”

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  • Super Bowl ad slams Tesla’s ‘Full Self-Driving’ tech | CNN Business

    Super Bowl ad slams Tesla’s ‘Full Self-Driving’ tech | CNN Business

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    New York
    CNN
     — 

    Electric carmaker Tesla will face a hit on Super Bowl Sunday, when an ad will play showing the alleged dangers of its Full Self-Driving technology.

    The commercial, which will be aired in Washington, DC, Austin, Tallahassee, Albany, Atlanta and Sacramento does not paint Tesla in the best light. The ad is part of a multimillion dollar advertising campaign by The Dawn Project. Its founder, Dan O’Dowd, is a California tech CEO who has dedicated millions of his own money (and a failed US Senate race) to the cause.

    The ad cost $598,000, a Dawn Project spokesperson told CNN.

    It shows a Tesla Model 3, which allegedly has the Full Self-Driving mode turned on, running over a child-sized dummy on a school crosswalk, and then a fake baby in a stroller, in a series of tests by the Dawn Project. In the ad, the car swerves into oncoming traffic, zooms past stopped school buses, and cruises through “do not enter” signs.

    “Tesla’s Full Self-Driving is endangering the public,” the ad said. “With deceptive marketing and woefully inept engineering.”

    The Dawn Project says it wants to make computer-controlled systems safer for humanity, shooting its own videos as tests of Tesla’s alleged design flaws. In August, O’Dowd published a video showing a Tesla plowing into child-sized mannequins. Some Tesla fans posted their own videos in defense, using their own dummies or even their own children – YouTube has taken down several test videos involving actual children, citing safety risks.

    O’Dowd received a cease and desist letter from Tesla over the video, claiming he and the Dawn Project were “disparaging Tesla’s commercial interests and disseminating defamatory information to the public.”

    O’Dowd responded to the cease-and-desist with a 1,736-word post in which he pushed back at the suggestion his posts were defamatory, defended his tests and returned barbs from Musk and some Tesla supporters.

    O’Dowd, who sold software to the military, is undertaking a campaign of millions of dollars to ban Tesla’s Full Self-Driving feature. He is running national ads and posting online videos displaying the possible dangers of Musk’s technology. He also ran an unsuccessful one-issue campaign for the US Senate on the same message.

    Though officially in beta mode, Full Self-Driving is available to any user in North America who wants to purchase the $15,000 feature.

    Tesla did not immediately respond to CNN’s request for comment. Tesla’s “Full Self-Driving” system is intended to someday work on city streets, but despite its wide rollout, is still officially in a developmental “beta” program. No car for sale on the market is yet able to drive itself.

    Autopilot is a suite of driver-assist features, while Full Self-Driving steers the car on city streets, but could also stop for traffic signals and make turns.

    Tesla contends it is not aware of any ongoing government investigation that has concluded any wrongdoing occurred, and said its Autopilot, with its automated steering designed to keep a car within a lane, is safer than normal driving.

    “Tesla’s reckless deployment of Full Self-Driving software on public roads is a major threat to public safety. Elon Musk has released software that will run down children in school crosswalks, swerve into oncoming traffic and hit a baby in a stroller to all Tesla owners in North America,” O’Dowd said in a statement.

    Tesla said it “has received requests from the Department of Justice for documents related to Tesla’s Autopilot and FSD features” in a January 31 public filing.

    Federal investigators are looking into a Musk tweet about disabling driver alerts on Tesla’s “Full Self Driving” driver assist system, joining several other National Highway Traffic Safety Administration probes.

    On December 31, Musk replied to a tweet by @WholeMarsBlog which said “users with more than 10,000 miles on FSD Beta should be given the option to turn off the steering wheel nag.”

    “Agreed, update coming in Jan,” Musk replied.

    The National Highway Traffic Safety Administration announced last summer it was escalating its Tesla probe to an “engineering analysis,” a step toward seeking a recall. NHTSA first investigated Tesla’s driver-assist technology after reports Autopilot-engaged vehicles were crashing into emergency vehicles stopped at the scene of earlier crashes.

    O’Dowd is the founder and CEO of Green Hills Software. Some of Musk’s defenders claim O’Dowd has a conflict of interest as one of its customers is Intel-owned Mobileye, which makes a computer chip to run driver-assisted software, the Washington Post reported.

    O’Dowd told the Washington Post Mobileye is one of his hundreds of customers and that his main motivation is safety.

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  • In a market that’s gone mad, investors can embrace these dependable stocks | CNN Business

    In a market that’s gone mad, investors can embrace these dependable stocks | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Many people don’t have the time or inclination to do deep research on stocks.

    It’s often easier to buy an exchange-traded fund that owns a basket of the top blue chips, like Apple

    (AAPL)    , Microsoft

    (MSFT)     and Amazon

    (AMZN)    . Other investors like to bet on themes and memes instead of poring over a company’s financial statements and regulatory filings. Hence the recent craze for momentum stocks like GameStop

    (GME)     and AMC

    (AMC)    .

    But for old-fashioned investors with a little gray in their hair (and veteran business journalists like yours truly) there are other ways to find winning stocks for the long haul.

    I’ve been running stock screens using market data software, first from FactSet and now from Refinitiv, on and off during the more than 20 years I’ve worked at CNN Business. (It was CNNMoney when I first started.)

    I’ve typically done this stock picking feature in early to mid February as a Stocks We Love type of story, pegging it to Valentine’s Day. (Here’s the first one I did in 2002!) So they’ve often been littered with cheesy references to how romantic it is to find a reliable company you can count on for a long-term relationship.

    Well, investing trends have changed a bit in the past two decades. Some would argue that active investing (actually choosing individual companies) is no longer in vogue thanks to the rise of passively run index funds.

    And to be fair, the experts are right, mostly. Investors usually are better off owning an index ETF. If the goal is saving for retirement in particular, a diversified mix of companies is safer than trying the riskier strategy of identifying individual winners and losers.

    But you know what they say about not being able to teach an old dog new tricks? I still believe there’s value in looking for quality stocks at bargain prices. Legendary investors like Warren Buffett and Peter Lynch of Fidelity fame would likely agree.

    With that in mind, I ran one final stock screen for this Valentine’s Day. Like my past screens, I tried to find companies with strong fundamentals (solid sales and earnings growth), low levels of debt and high returns on equity. And perhaps most importantly, I screened for companies trading at a reasonable price based on their estimated earnings.

    This screen wound up identifying 33 companies that could make sense as a buy-and-hold investment. All of them generated double-digit sales growth annually over the past five years and they are all expected to report profit growth of at least 10% a year for the next few years.

    Some of the more prominent companies on the list? IT services/consulting giant Accenture

    (ACN)     made the cut. So did software leader Adobe

    (ADBE)    , semiconductor manufacturer Analog Devices

    (ADI)    , chip equipment juggernaut Applied Materials

    (AMAT)     and Venmo owner PayPal

    (PYPL)    .

    That’s a fair amount of exposure to the tech sector. But several other non-techs made my list too.

    Auto insurer Progressive

    (PGR)     (hi Flo!), health insurer Humana

    (HUM)    , cosmetics retailer Ulta Beauty

    (ULTA)    , UGG boots and Hoka sneakers maker Deckers Outdoor

    (DECK)     and trucker JB Hunt

    (JBHT)     met my criteria.

    As did financial services firm Raymond James

    (RJF)    , perhaps most famous for having its name on the Tampa Bay Buccaneers stadium Tom Brady briefly called home.

    None of these stocks are likely to be moonshots that will surge because of comments that someone makes on Reddit. But they might offer a little more in the way of security and dependability. And after all, isn’t that what we all want from a long-term partner on Valentine’s Day?

    The broader market has continued to rally, in large part due to hopes that inflation pressures (and more Federal Reserve rate hikes) will soon be things of the past. But consumers are still skittish when it comes to buying more costly items.

    Meat processing giant Tyson Foods

    (TSN)     reported disappointing results last week, largely due to a pullback in consumer demand for pricier beef. Luxury apparel retailer Capri Holdings

    (CPRI)    , which owns the Versace, Jimmy Choo and Michael Kors brands, also posted lousy numbers.

    But shoppers still seem to be spending on more affordable goods. Pepsi

    (PEP)     reported sales and earnings last week that topped Wall Street’s targets. Fast food giant Yum! Brands

    (YUM)    , the owner of Taco Bell, KFC and Pizza Hut, issued solid results too.

    That could bode well for several leading consumer companies that are on tap to report earnings this week, including Pepsi competitor Coca-Cola

    (KO)     as well as Restaurant Brands

    (QSR)    , the parent company of Burger King, Popeyes, Tim Horton and Firehouse Subs.

    Kraft Heinz

    (KHC)    , restaurant owner Bloomin’ Brands

    (BLMN)    , Sam Adams brewer Boston Beer

    (SAM)     and food delivery service DoorDash are also scheduled to release their latest results this week.

    The restaurant stocks in particular could do well.

    “Consumers continue to trade goods for services,” said Jharonne Martis, director of consumer research for Refinitiv, in a report. Martis noted that the restaurant and broader leisure sector has continued to outperform other consumer-related industries this year.

    Inflation is obviously still a concern for big consumer brands. Companies have to deal with the challenge of trying to pass on higher costs to customers without driving them away.

    That could become less of a problem though.

    The US government will report both its Consumer Price Index and Producer Price Index for January this week and economists are hoping for a further slowdown in year-over-year prices. Consumer prices rose 6.5% over the past 12 months through December, down from a 7.1% pace in November.

    “There are positive signs. Inflation has passed the peak so there is a little bit of a respite,” said Kathryn Kaminski. chief research strategist with AlphaSimplex.

    Higher prices were a problem for retailers during the holidays. Retail sales fell 1.1% in December from November, according to figures from the US government, following a 0.6% drop in November.

    But retail sales are expected to bounce back as inflation becomes less of an issue. Economists are forecasting a 0.9% increase in retail sales for January when those numbers come out later this week.

    Monday: Earnings from TreeHouse Foods

    (THS)    , Avis Budget

    (CAR)    , FirstEnergy

    (FE)    , IAC

    (IAC)     and Palantir

    Tuesday: US CPI; Japan GDP; UK employment report; earnings from Coca-Cola, Asahi Group, Marriott

    (MAR)    . Cleveland-Cliffs

    (CLF)    , Restaurant Brands, Suncor Energy

    (SU)    , Airbnb, Herbalife

    (HLF)    , GoDaddy

    (GDDY)     and TripAdvisor

    (TRIP)

    Wednesday: US retail sales; UK inflation; weekly crude oil inventories; annual meeting of Charlie Munger’s Daily Journal Co

    (DJCO)    ; earnings from Kraft Heinz, Lithia Motors

    (LAD)    , Sunoco

    (SUN)    , Sonic Automotive

    (SAH)    , Ryder

    (R)    , Barrick Gold

    (GOLD)    , Biogen

    (BIIB)    , Owens Corning

    (OC)    , Krispy Kreme, Cisco

    (CSCO)    , AIG

    (AIG)    , Shopify

    (SHOP)     and Boston Beer

    Thursday: US PPI; US weekly jobless claims: US housing starts and building permits; China housing prices; earnings from US Foods

    (USFD)    , Lenovo

    (LNVGF)    , Nestle

    (NSRGF)    , Paramount Global, Southern

    (SO)    , Hasbro

    (HAS)    , Hyatt

    (H)    , Bloomin’ Brands, WeWork, Applied Materials

    (AMAT)    , DoorDash, DraftKings and Redfin

    (RDFN)

    Friday: Earnings from Deere

    (DE)    , AutoNation

    (AN)    , Sands China

    (SCHYF)     and AMC Networks

    (AMCX)

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  • Hogwarts Legacy breaks record before official release, despite controversy | CNN Business

    Hogwarts Legacy breaks record before official release, despite controversy | CNN Business

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    New York
    CNN
     — 

    The world of Harry Potter is getting new life.

    Hogwarts Legacy – the new open-world video game by Avalanche and Warner Bros. Discovery, CNN’s parent company, will be released Friday, to much anticipation.

    The single-player game has been five years in the making — experts put its budget at $150 million. The game already broke a record on Twitch for being the most-watched single-player game, played by streamers who got the game early. And it’s the No. 1 pre-sale this week on gaming platform Steam.

    “Open world style games are a really a big deal in the games industry,” said Joost van Dreunen, an adjunct professor at New York University’s Stern School of Business who was formerly CEO of games market research firm Super Data Research. “The expectations are quite high not just from the consumers, but also from the game makers themselves.”

    Warner Bros. has had 20 years of experience putting out Harry Potter video games — but those were based on the movies. Not every game was a blockbuster hit, despite the fandom around the Harry Potter franchise.

    Hogwarts Legacy is based on Harry Potter but is set in the late 1800s, well before the action in the Harry Potter books take place, and opens the Harry Potter World beyond Hogwarts Castle. Players are witch or wizard avatars that complete missions to gain skills such as flying on a broom.

    “They definitely put out some big titles and worked with some big franchises, but their games have been hit and miss,” Dan Martin, general manager at videogamesnewyork says of the Warner Bros. games.

    The game’s release has been delayed twice — building excitement from Potter fans but then fizzling. Videogamesnewyork, a New York City store that sells modern and retro video games, is ordering just enough games to their store based on pre-orders.

    “We’re not over-ordering or under ordering. Only because we don’t know what to expect,” said Martin.

    Part of the game’s expectation is based on controversy surrounding Harry Potter’s creator — J.K. Rowling. The author has repeatedly made anti-trans comments, and some of the movies’ actors have spoken out against them. Some gamers also are boycotting Hogwarts Legacy over the controversy.

    “It’s not a commercial risk so much as is a cultural one,” van Dreunen said of the game’s release.

    The game features a trans character, a first for the franchise. Though the Hogwarts Legacy character Sirona Ryan does not explicitly say she is trans, dialogue in a scene suggests it: “[It] took them a second to realize I was actually a witch, not a wizard,” the character said.

    Warner Bros. Discovery said creating diverse characters was a high priority in order to encompass all people who play the games including the LGBTQIA+ community.

    The company says J.K. Rowling is not involved in the Hogwarts Legacy game. But she does stand to make licensing royalties. Some fans have been turned off to the franchise because of Rowling’s comments, others say they won’t let that get in the way of experiencing a new world of Harry Potter.

    “There was a time when I thought it was going to impact my view on the whole Harry Potter world, but I am able to separate the situation with JK Rowling with the Harry Potter world,” said Camila Rodrigues, a Harry Potter fan who says she plans to buy the game.

    Despite the controversy, gaming experts anticipate a blockbuster release — easily selling 10 million copies, according to some estimates. In some ways, the game is a re-branding opportunity for the franchise.

    “It perhaps has room to develop something new, to iterate on the existing relationship with its fan base,” said van Dreunen. “Perhaps making it into this big production video game allows the franchise to kind of save itself a little bit from the drag it’s been experiencing culturally.”

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  • The week that tech became exciting again | CNN Business

    The week that tech became exciting again | CNN Business

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    CNN Business
     — 

    Let’s be honest: For much of the past decade, tech events have been pretty boring.

    Executives in business casual wear trot up on stage and pretend a few tweaks to the camera and processor make this year’s phone profoundly different than last year’s phone or adding a touchscreen onto yet another product is bleeding edge.

    But that changed radically this week. Some of the world’s biggest companies teased significant upgrades to their services, some of which are central to our everyday lives and how we experience the internet. In each case, the changes were powered by new AI technology that allows for more conversational and complex responses.

    On Tuesday, Microsoft announced a revamped Bing search engine using the capabilities of ChatGPT, the viral AI tool created by OpenAI, a company in which Microsoft recently invested billions of dollars. Bing will not only provide a list of search results, but will also answer questions, chat with users and generate content in response to user queries. And there are already rumors of another event next month for Microsoft to demo similar features in its Office products, including Word, PowerPoint and Outlook.

    On Wednesday, Google held an event to detail how it plans to use similar AI technology to allow its search engine to offer more complex and conversational responses to queries. Chinese tech giants Alibaba and Baidu also said this week that they would be launching their own ChatGPT-style services. And other companies are sure to follow suit soon.

    After years of incremental updates to smartphones, the promise of 5G that still hasn’t taken off and social networks copycatting each others’ features until they all the look the same, the flurry of AI-related announcements this week feels like a breath of fresh air.

    Yes, there are very real concerns about the potential of this technology to spread biases and inaccurate information, as happened in a Google demo this week. And it’s certainly likely numerous companies will introduce AI chatbots that simply do not need one. But these features are fun, have the potential to give us back hours in the day and, perhaps most importantly, some are here right now to try out.

    Need to write a real estate listing or an annual review for an employee? Plug a few keywords into a ChatGPT query bar and your first draft is done in three seconds. Want to come up with a quick meal plan and grocery list based on your dietary sensitivities? Bing, apparently, has you covered.

    If the introduction of smartphones defined the 2000s, much of the 2010s in Silicon Valley was defined by the ambitious technologies that didn’t fully arrive: self-driving cars tested on roads but not quite ready for everyday use; virtual reality products that got better and cheaper but still didn’t find mass adoption; and the promise of 5G to power advanced experiences that didn’t quite come to pass, at least not yet.

    But technological change, like Ernest Hemingway’s idea of bankruptcy, has a way of coming gradually, then suddenly. The iPhone, for example, was in development for years before Steve Jobs wowed people on stage with it in 2007. Likewise, OpenAi, the company behind ChatGPT, was founded seven years ago and launched an earlier version of its AI system called GPT3 back in 2020.

    “ChatGPT exploded onto the market and people’s awareness,” said Bern Elliot, an analyst at Gartner, “but this has been a long time in the making.”

    More than that, artificial intelligence systems have for years underpinned many of the functions people may now take for granted, from content recommendations on social media platforms and auto-complete tools in e-mail to voice assistants and facial recognition tools. But when ChatGPT was released publicly in November, it put the power of AI systems on full display for millions in an entertaining and immediately graspable way. ChatGPT simultaneously made it much easier to see how far the technology has progressed in recent years and to imagine the vast potential for the impact it could have across industries.

    “When new generations of technologies come along, they’re often not particularly visible because they haven’t matured enough to the point where you can do something with them,” Elliott said. “When they are more mature, you start to see them over time — whether it’s in an industrial setting or behind the scenes — but when it’s directly accessible to people, like with ChatGPT, that’s when there is more public interest, fast.”

    Now that ChatGPT has gained traction and prompted larger companies to deploy similar features, there are concerns not just about its accuracy but its impact on real people.

    Some people worry it could disrupt industries, potentially putting artists, tutors, coders, writers and journalists out of work. Others are more optimistic, postulating it will allow employees to tackle to-do lists with greater efficiency or focus on higher-level tasks. Either way, it will likely force industries to evolve and change, but that’s not? necessarily a bad thing.

    “New technologies always come with new risks and we as a society will have to address them, such as implementing acceptable use policies and educating the general public about how to use them properly. Guidelines will be needed,” Elliott said.

    Many experts I’ve spoken with in the past few weeks have likened the AI shift to the early days of the calculator and how educators and scientists once feared how it could inhibit our basic knowledge of math. The same fear existed with spell check and grammar tools.

    While AI tools are still in their infancy, this week may represent the start of a new way of doing tasks, similar to how the iPhone changed computing and communication in June 2007. But this time, it could be in the form of a Bing browser.

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  • Bad news: Consumer prices actually climbed in December | CNN Business

    Bad news: Consumer prices actually climbed in December | CNN Business

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    Minneapolis
    CNN
     — 

    December consumer prices rose from the month before and did not fall as previously thought, according to revised data from the Bureau of Labor Statistics released Friday.

    The newly calibrated Consumer Price Index shows that prices rose 0.1% on a seasonally adjusted basis in December from November versus a previously estimated decline of 0.1%.

    Every year, the BLS recalculates seasonal adjustment factors for CPI going back five years. (However, the year-over-year data, which is not seasonally adjusted, is not revised.)

    The latest annual adjustments show slight shifts in the month-on-month inflation trend for 2022 — with November and October revised up by 0.1 percentage points.

    Core CPI, which excludes the more volatile categories of food and energy, saw upward revisions of 0.1 percentage points in December and November to 0.4% and 0.3%, respectively.

    “Whether you’re talking about inflation, labor markets, GDP, these things all go through seasonal adjustment procedures and do get revised over time,” said Andrew Patterson, senior economist in Vanguard’s investment strategy group.

    “There’s not usually a whole lot of focus on it, but given the magnitude of inflation and the volatility of macro fundamentals these days, it’s probably gotten a little bit more attention than typical,” he added.

    The latest BLS tweaks show the importance of not reading into any one data point but instead reviewing a variety of different metrics over a longer-term period, he said, a point that has been repeatedly stressed by officials such as Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen as they measure the path of inflation.

    But the revisions don’t change the overall storyline, Patterson noted.

    “We continue to believe that inflation is going to grind down over the course of the year,” he said.

    The annual revisions also come just days before the release of the January CPI report, which will debut some modifications of its own: changing its weighting methodology from consumption patterns collected every two years to a single year of spending data.

    “This means that this 2023 CPI report will be based on consumer spending patterns that took place in 2021, as opposed to 2022’s CPI data, which was based on spending data over 2019-2020,” William Blair analyst Richard de Chazal wrote in a note Friday. “From the BLS’s perspective, this makes the data more timely and relevant, and a better reflection of actual spending patterns.”

    The adjustments could help better gauge economic activity during what’s been a very unpredictable time, noted Diane Swonk, KPMG chief economist, in a Twitter thread this week.

    “The U.S. statistical agencies work extremely hard to measure and seasonally adjust the data accurately to reflect what where once considered normal season variations — everything from the surge in extreme weather events we are enduring to the unusual dynamics of an economy that is still emerging from a pandemic have distorted normal seasonal patterns,” she wrote.

    “Those shifts, coupled with the rapid pace at which the economy is currently shifting has made measuring current economic conditions more difficult. It is hard to tell where we are, let alone where the economy is headed,” she said.

    Here’s how the adjusted data looks for 2022:

    Month: Original data vs. Revised

    January: 0.6% vs. 0.6%

    February: 0.8% vs. 0.7%

    March: 1.2% vs. 1%

    April: 0.3% vs. 0.4%

    May: 1% vs. 0.9%

    June: 1.3% vs. 1.2%

    July: 0.1% vs. 0%

    August: 0.1% vs. 0.2%

    September: 0.4% vs. 0.4%

    October: 0.4% vs. 0.5%

    November: 0.1% vs. 0.2%

    December: -0.1% vs. 0.1%

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  • Lyft shares fall nearly 25% after forecasting revenue below estimates | CNN Business

    Lyft shares fall nearly 25% after forecasting revenue below estimates | CNN Business

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    Reuters
     — 

    Lyft

    (LYFT)     on Thursday forecast current-quarter revenue below Wall Street estimates, blaming extremely cold weather in some of its major markets and lower prices, especially during peak hours, sending its shares down nearly 25% in extended trading.

    The company’s outlook was in contrast to that of its larger rival Uber

    (UBER)    , whose strong presence globally is helping it ride a boom in demand for ride-hailing services from travelers and office-goers

    Lyft’s bigger presence on the U.S. West Coast, a region that analysts have said was trailing the rest of the United States in return to pre-COVID demand, could be hurting its recovery compared with Uber.

    Company president John Zimmer said in an interview that the West Coast had “not fully” recovered but noted a “material improvement.”

    Lyft forecast first-quarter revenue of about $975 million, which fell below analyst estimates of $1.09 billion, according to Refinitiv data.

    Its forecast for first-quarter adjusted earnings before interest, taxes depreciation and amortization (EBITDA), a key measure of profitability that strips out some costs, was between $5 million and $15 million.

    For the fourth quarter, Lyft reported an adjusted EBITDA of $126.7 million, excluding $375 million it had set aside for increasing insurance reserves. Analysts had forecast $91.01 million.

    “We wanted to ensure we strengthened our insurance reserve … the purpose of doing that is to ensure we don’t have that type of volatility going forward, because we did such a large reserve on the high end of what we could expect given the size of our insurance book,” Zimmer said in an interview.

    Active riders rose 8.7% increase to 20.36 million for the fourth quarter, Lyft said. Analysts were expecting 20.30 million, according to FactSet estimates.

    Rideshare was “really back … we’re happy with the current marketplace conditions,” Zimmer said.

    Revenue rose 21% to $1.18 billion, slightly above the average estimate of $1.16 billion.

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  • Alibaba is launching a ChatGPT rival too | CNN Business

    Alibaba is launching a ChatGPT rival too | CNN Business

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    Hong Kong
    CNN
     — 

    Alibaba says it will launch its own ChatGPT-style tool, becoming the latest tech giant to jump on the chatbot bandwagon.

    The Chinese behemoth said it was testing an artificial intelligence-powered chatbot internally. It did not share details of when it would launch or what the application would be called.

    “Frontier innovations such as large language models and generative AI have been our [focus] areas since the formation of DAMO in 2017,” an Alibaba

    (BABA)     spokesperson told CNN in a Thursday statement, referring to an acronym for the company’s research arm that focuses on machine intelligence, data computing and robotics.

    “As a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users.”

    Alibaba’s Hong Kong-listed shares ticked up 1.4% on Thursday morning.

    Companies around the world are racing to develop and release their own versions of ChatGPT, the application that allows users to automatically write essays or pass tests.

    The tool is built on a large language model, which is trained on vast troves of data online in order to generate compelling responses to user prompts. Experts have long warned that these tools have the potential to spread inaccurate information.

    This week, Google

    (GOOGL)     and Chinese search engine giant Baidu

    (BIDU)     both unveiled plans to launch similar services of their own.

    Google’s tool, named “Bard,” will roll out to the public in the coming weeks, while Baidu’s bot, called “Wenxin Yiyan” in Chinese or “ERNIE Bot” in English, will launch in March.

    Bard suffered an embarrassing setback this week, however, after producing an incorrect response during a public demonstration.

    Shares in Google’s parent company, Alphabet, fell nearly 8% Wednesday following the news.

    Microsoft

    (MSFT)    , too, has gotten in the game. The firm announced a makeover for its Bing search engine on Tuesday, saying it would update the platform to answer questions, chat with users and produce content in response to prompts using artificial intelligence.

    The company is also investing billions of dollars in OpenAI, the company behind ChatGPT.

    — CNN’s Catherine Thorbecke contributed to this report.

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  • Bed Bath & Beyond was a retail pioneer. Here’s what went wrong | CNN Business

    Bed Bath & Beyond was a retail pioneer. Here’s what went wrong | CNN Business

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    New York
    CNN
     — 

    Bed Bath & Beyond, America’s quintessential home furnishings’ chain, is fighting to stay in business.

    The company has avoided a bankruptcy filing for now by completing a complex stock offering that will give it an immediate injection of $225 million in funds and a pledge for $800 million in the future to pay down its current debt load.

    Bed Bath & Beyond is also shrinking to save money. The company said it plans to close around 400 of its roughly 760 Bed Bath & Beyond stores. It will keep open its most profitable stores in key markets.

    The moves are a lifeline for Bed Bath & Beyond. They will give the company time to pursue a turnaround without a bankruptcy filing, which can be costly, out of its control and wind up in a liquidation.

    “They are essentially doing a reorganization outside of bankruptcy court,” said Daniel Gielchinsky, an attorney at DGIM Law specializing in bankruptcy. “Slow the cash burn is the name of the game for the next 6 to 12 months and allow the company to pivot into a profitable position.”

    It will be a complicated turnaround and the company’s future remains uncertain. If Bed Bath & Beyond comes up short in the current version of its turnaround plan, the likelihood of a liquidation increases.

    Here’s how Bed Bath & Beyond, once a retailer pioneer, veered to the edge of bankruptcy and where it turns next.

    Bed Bath & Beyond had been a crown jewel of the era of so-called “category killers”: chains that dominated a category of retail, such as Toys “R” Us, Circuit City and Sports Authority. Those companies, too, ultimately filed for bankruptcy.

    Bed Bath & Beyond became known for pots and pans, towels and bedding stacked from the floor to the ceilings at its cavernous stores — and for its ubiquitous 20%-off coupons. The blue-and-white coupons became something of a pop culture symbol, and millions of Americans wound up stashing them away in their cars, closets and basements.

    The retailer attracted a broad range of customers by selling name brands at cut-rate prices. Brands coveted a spot on Bed Bath & Beyond’s shelves, knowing it would lead to big sales. Plus, the open-store layout encouraged impulse buying: Shoppers would come in to buy new dishes and walk out with pillows, towels and other items.

    Stores were a fixture for shoppers around the winter holidays and during the back-to-school and college seasons, and Bed Bath & Beyond also had a strong baby and wedding registry business.

    Founded in 1971 by two veterans of discount retail in Springfield, New Jersey, the chain of small linen and bath stores — then called Bed ‘n Bath — first grew around the northeast and in California selling designer bedding, a new trend at the time. Unlike department stores, it didn’t rely on sales events to draw customers.

    “We had witnessed the department store shakeout and knew that specialty stores were going to be the next wave of retailing,” co-founder Leonard Feinstein reportedly said in 1993. “It was the beginning of the designer approach to linens and housewares and we saw a real window of opportunity.”

    In 1987, the company changed its name to Bed Bath & Beyond to reflect its expanded merchandise and bigger “superstores.” The company went public in 1992 with 38 stores and around $200 million in sales.

    By 2000, those figures leaped to 241 stores and $1.1 billion in sales. The 1,000th Bed Bath & Beyond store opened in 2009, when the chain had reached $7.8 billion in sales.

    The company was something of an iconoclast. It spent little on advertising, relying instead on print coupons distributed in weekly newspapers to attract customers.

    “Why not just tell the customer that we’ll give you a discount on the item you want — and not the one that we want to put on sale? We’ll mail a coupon, and it will be a lot cheaper,” Bed Bath & Beyond co-founder Warren Eisenberg, now 92, said in a 2020 New York Times interview.

    The chain was known for giving autonomy to store managers to decide which products to stock, allowing them to customize their individual stores, and for shipping products directly to stores instead of a central warehouse.

    But as brick-and-mortar began to give way to e-commerce, Bed Bath & Beyond was slow to make the transition — a misstep compounded by the fact that home decor is one of the most commonly bought categories online.

    “We missed the boat on the internet,” Eisenberg said in a recent Wall Street Journal interview.

    Online shopping weakened the allure of Bed Bath & Beyond’s fan-favorite coupons, too, because consumers could find plenty of cheaper alternatives on Amazon or browse a wider selection on sites like Wayfair

    (W)    .

    It wasn’t just Amazon and online shopping that sank Bed Bath & Beyond, however.

    Bed Bath & Beyond's ubiquitous coupons lost some of their appeal.

    Walmart

    (WMT)    , Target

    (TGT)     and Costco

    (COST)     have grown over the past decade, and they have been able to draw Bed Bath & Beyond customers with lower prices and a wider array of merchandise. Discount chains such as HomeGoods and TJ Maxx and have also undercut Bed Bath & Beyond’s prices.

    Without the differentiators of the lowest prices or widest selection, Bed Bath & Beyond’s sales stagnated from 2012 to 2019.

    The company was hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. Sales sunk 17% in 2020 and 15% in 2021.

    What’s more, Bed Bath & Beyond has rotated through several different executives and turnaround strategies in recent years.

    Former Target executive Mark Tritton took the helm in 2019 with backing from investors and a bold new strategy. He scaled back coupons and inventory from national brands in favor of Bed Bath & Beyond’s own private-label brands.

    But this change alienated customers who were loyal to big brands. The company also fell behind on payments to vendors and stores did not have enough merchandise to stock shelves. Tritton left as CEO in 2022.

    As of late November the company had 949 stores, including 762 Bed Bath & Beyond stores and 137 buybuyBaby stores.

    It said Tuesday that it will ultimately have about half that number – 360 Bed Bath & Beyond stores and 120 buybuyBaby locations.

    Bed Bath & Beyond will close stores that drain the most cash out of its business.

    But the closures will mean Bed Bath & Beyond will give up on stores that brought in $1.2 billion in annual sales, Michael Lasser, an analyst at UBS, said in a note to clients Tuesday. Bed Bath & Beyond will recapture a portion of those sales from its other stores and online, Lasser said, but the majority will go to other retailers.

    But, to survive, the company needs to grow sales at its remaining stores. Otherwise, too much of Bed Bath & Beyond’s revenue will go toward repaying debt that it won’t be able to turn a profit.

    Reversing sales declines won’t be easy given challenges with waning customer demand, online traffic and rising competition in Bed Bath & Beyond product categories, Lasser said. Bed Bath & Beyond will have to overcome its significant hurdles to become a healthy, profitable company.

    Bankruptcy lawyer Daniel Gielchinsky, however, said it was an encouraging sign that Bed Bath & Beyond was able to raise enough cash through a public offering to stay afloat. The offering was reportedly backed by investment firm Hudson Bay Capital. (Hudson Bay did not respond to a CNN Business request for comment.)

    Still, liquidators will be watching closely, he said, eager to pounce.

    “They are assuredly waiting on the sidelines to dismantle the company at the ready.”

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  • Here’s what keeps Jerome Powell up at night and interest rates high | CNN Business

    Here’s what keeps Jerome Powell up at night and interest rates high | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Federal Reserve Chairman Jerome Powell threw markets into a tizzy on Tuesday as he spoke about the economy alongside his former boss, Carlyle Group co-founder David Rubenstein, at the Economic Club of Washington.

    Stocks struggled for direction as investors tried to get a read on Powell’s economic outlook, attitude towards inflation and on future interest rate hikes. Wall Street cheered as the Fed chair said the disinflationary process has begun, then soured when he said the road to reaching 2% inflation will be “bumpy” and “long” with more rate hikes ahead.

    Markets soared to new highs, before quickly falling to session lows and then recovering to close the day in the green.

    “Powell doesn’t want to play games with financial markets,” said EY Parthenon chief economist Gregory Daco after the conversation. But at the same time, he said Powell wanted to communicate that the Fed’s “base case was not for inflation to come down as quickly and painlessly as some market participants appear to expect.”

    Here’s why Powell thinks bringing down prices will be more difficult than investors anticipate.

    Structural changes in the labor market: The US economy added an astonishing 517,000 jobs in January, blowing economists’ expectations out of the water. The unemployment rate fell to 3.4% from 3.5%, hitting a level not seen since May 1969.

    The current labor market imbalance is a reflection of the pandemic’s lasting effect on the US economy and on labor supply, said Powell on Tuesday in answer to a question about the report. “The labor market is extraordinarily strong,” he said. Demand exceeds supply by 5 million people, and the labor force participation rate has declined. “It feels almost more structural than cyclical.”

    “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more,” he said.

    Core services inflation: Powell noted that he’s seeing disinflation in the goods sector and expects to soon see declining inflation in housing. But prices remain stubborn for services. Service-sector inflation, which is more sensitive to a strong labor market, is up 7.5% from the year prior through the end of 2022, and has not abated, he said.

    “That sector is not showing any disinflation yet,” Powell said. “There has been an expectation that [higher prices] will go away quickly and painlessly and I don’t think that’s at all guaranteed.”

    Geopolitical uncertainties: Powell also cited concerns that the reopening of China’s economy after the sudden end of Covid-Zero restrictions, plus uncertainty about Russia’s war on Ukraine could also affect the inflation path in ways that remain unclear.

    ▸ The labor market is strong, but tech layoffs keep coming. There were around  50,000 tech jobs cut in January, and the trend has continued into February.

    Video conferencing service Zoom is one of the latest to announce layoffs. The company said Tuesday that it’s cutting 1,300 jobs or 15% of its workforce. 

    Zoom CEO Eric Yuan said in a blog post on Tuesday that Zoom ramped up employment  quickly due to increased demand during the pandemic. The company grew three times in size within 24 months, he said and now it must  adapt to changing demand for its services.

    “The uncertainty of the global economy, and its effect on our customers, means we need to take a hard — yet important — look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision,” he wrote.

    Yuan added that he plans to lower his own salary by 98% and forgo his 2023 bonus. Shares of Zoom closed nearly 10% higher on Tuesday. 

    The announcement comes just one day after Dell said it would lay off more than 6,500 employees.

    Amazon

    (AMZN)    , Microsoft

    (MSFT)    , Google and other tech giants have also recently announced plans to cut thousands of workers as the companies adapt to shifting pandemic demand and fears of a looming recession.

    ▸ Neel Kashkari, president of the Federal Reserve Bank of Minneapolis told CNN that he is starting to think that the US economy could avoid a recession and achieve a so-called soft landing.

    It’s hard to have a recession when the job market is still so robust, he told CNN’s Poppy Harlow on Tuesday on CNN This Morning.

    Still, “we have more work to do,” Kashkari told Harlow, adding that the labor market is “too hot” and that is a key reason why it is “harder to bring inflation back down.”

    Although many investors are starting to think the Fed may pause after just two more similarly small hikes, to a level of around 5%, Kashkari said he believes the Fed may have to raise rates further. Kashkari has a vote this year on the Federal Open Market Committee, the Fed’s interest-rate setting group.

    ▸ It’s a good time to be in the oil business. BP’s annual profit more than doubled last year to an all-time high of nearly $28 billion.

    The British energy company said in a statement that underlying replacement cost profit rose to $27.7 billion in 2022 from $12.8 billion the previous year. The metric is a key indicator of oil companies’ profitability.

    BP

    (BP)     also unveiled a further $2.75 billion in share buybacks and hiked its dividend for the fourth quarter by around 10% to 6.61 cents per share.

    BP’s shares rose 6% in Tuesday trading following the news. Over the past 12 months, its shares have soared 24%.

    The earnings are the latest in a string of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of skyrocketing oil and gas prices.

    Last week, another energy major Shell reported a record profit of almost $40 billion for 2022, more than double what it raked in the previous year after oil and gas prices jumped following Russia’s invasion of Ukraine.

    On Wednesday it was TotalEnergie

    (TTFNF)    s turn. The French company posted annual profit of $36.2 billion for 2022, double the previous year’s earnings.

    Disney has found itself in the middle of a culture war battle that could end up transferring Disney World’s governance to a board appointed by Florida Gov. Ron DeSantis. And that may be the least of Disney’s problems, writes my colleague Chris Isidore.

    The company faces a media industry in turmoil, plunging cable subscriptions, a still-recovering box office, massive streaming losses, activist shareholders, possible reorganization and layoffs and growing labor disputes with employees. That’s a lot for CEO Bob Iger to handle.

    Iger, who retired as CEO in 2020 only to be brought back in November, has been mostly quiet about his plans for the company since his return. That ends at 4:30 p.m. ET Wednesday when he is set to begin an earnings call with Wall Street investors.

    Click here to read more about what to look for on what is certain to be a closely-followed call.

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  • Bed Bath & Beyond is closing 150 more stores | CNN Business

    Bed Bath & Beyond is closing 150 more stores | CNN Business

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    New York
    CNN
     — 

    Bed Bath & Beyond is closing 150 more stores — just a week after the struggling retailer announced the closure of 87 locations.

    The company’s brick-and-mortar footprint has already shrunk dramatically, a regulatory filing showed late Monday, and the new closings mean it will have shuttered 400 stores in the past year — almost half the 950 or so stores it had open in February 2022.

    That includes last week’s announcement that it was also closing all 49 remaining Harmon Face Value stores, which sold cosmetics; plus 5 buybuy Baby locations. A list of the new store closures wasn’t immediately available.

    A turnaround doesn’t look imminent: The embattled home goods chain forecasts first quarter sales to be down by 30% to 40% with “sequential, quarterly sales improvement thereafter” the filing said.

    The company also said Monday it was planning to raise some $1 billion through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy. If it can’t complete the complex transaction, it would “likely file for bankruptcy protection.” It also appointed Holly Etlin, a bankruptcy expert, as interim chief financial officer.

    The chain has said in recent weeks that it had defaulted on a loan and may not be able to remain in business, raising concerns about its future. Bed Bath & Beyond held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering, according to Reuters.

    Bed Bath and Beyond has been part of the meme stock phenomenon, with shares skyrocketing as much as 400% last year when activist investor and GameStop chairman Ryan Cohen took a stake and sought changes.

    Shares of the retailer, which closed up 92% at $5.86 in a rollercoaster session Monday, were down 40% in in pre-market trading Tuesday.

    Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. It’s also known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings.

    But the company struggled to make the transition to online shopping and fend off larger chains such as Walmart and Target

    (TGT)    . Many shoppers switched to those competitors as the novelty of Bed Bath & Beyond’s coupons faded.

    The company was also hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.

    – Reuters contributed to this report

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  • BP’s annual profit more than doubles to $28 billion | CNN Business

    BP’s annual profit more than doubles to $28 billion | CNN Business

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    Hong Kong
    CNN
     — 

    BP’s annual profit more than doubled last year to nearly $28 billion, extending a record run of earnings for the world’s oil majors that is adding to calls for higher taxes on the windfall gains.

    The British energy giant said in a statement that underlying replacement cost profit rose to $27.7 billion for 2022, compared with $12.8 billion the previous year. The metric is a key indicator of oil companies’ profitability.

    BP

    (BP)     also announced on Tuesday a further $2.75 billion in share buybacks and hiked its dividend for the fourth quarter by around 10% to 6.61 cents per share.

    The earnings are the latest in a series of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of soaring oil and gas prices.

    Last week, Shell

    (RDSA)     reported a record profit of almost $40 billion for 2022, more than double what it raked in the previous year after oil and gas prices soared following Russia’s invasion of Ukraine.

    — This is a developing story and will be updated.

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  • Former Manhattan attorney says ‘many bits and pieces of evidence’ exist to charge Trump | CNN Politics

    Former Manhattan attorney says ‘many bits and pieces of evidence’ exist to charge Trump | CNN Politics

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    CNN
     — 

    A former Manhattan special assistant district attorney who investigated Donald Trump said Sunday night there are “many bits and pieces of evidence” the district attorney could use to bring criminal charges against the former president.

    Mark Pomerantz, a former senior prosecutor on the Manhattan DA’s team investigating Trump and his organization’s business dealings, said prosecutors weighing similar evidence against anyone other than the former president would have moved ahead with charges in a “flat second.”

    Pomerantz made the comments in a “60 Minutes” interview promoting a new book about his time investigating Trump. He pointed to evidence he had access to during the investigation – principal among them, that Trump personally signed off on inflating his own net worth to obtain more favorable banks loans.

    “There were many bits and pieces of evidence on which we could rely in making that case,” Pomerantz told CBS’s Bill Whitaker.

    New York Attorney General Letitia James, a Democrat, filed a civil lawsuit against Trump, his eldest children and others alleging they were engaged in a decade long fraud by using inaccurate financial statements to obtain favorable loan and insurance rates and tax treatment. The burden of proof in a civil lawsuit is lower than what prosecutors need to prove a criminal case. Trump has called the lawsuit politically motivated and has denied any wrongdoing.

    The allegations come nearly a year after Pomerantz resigned from the DA’s office in protest and days before the release of his new book, which has prompted pushback from District Attorney Alvin Bragg.

    Pomerantz resigned after Bragg, who was newly sworn into office, refused to give him a green light to seek an indictment against Trump. The district attorney’s office previously brought tax fraud charges against the Trump Organization and chief financial officer Allen Weisselberg, who pleaded guilty.

    Pomerantz resigned last February along with general counsel Carey Dunne.

    “If you take the exact same conduct – and make it not about Donald Trump and not about a former president of the United States, would the case have been indicted? It would have been indicted in a flat second,” Pomerantz said Sunday. He called Bragg’s decision not to bring the case a “grave failure of justice.”

    Pomerantz’s claims detailed in his forthcoming book have drawn the ire of his former boss and the DA’s Association of the State of New York, who claim that a former prosecutor speaking out about a case he used to be a part of could damage its integrity.

    Bragg’s office asked to review the book before its publication out of concern it would reveal information obtained from a grand jury. Simon & Schuster, the publisher, moved ahead with publication.

    “After closely reviewing all the evidence from Mr. Pomerantz’s investigation, I came to the same conclusion as several senior prosecutors involved in the case, and also those I brought on: more work was needed. Put another way, Mr. Pomerantz’s plane wasn’t ready for takeoff,” Bragg said in a statement to CNN.

    Bragg added that he hasn’t “read the book, and won’t comment on any ongoing investigation because of the harm it could cause to the case. But I do hope there is at least one section where Mr. Pomerantz recognizes his former colleagues for how much they have achieved on the Trump matter over the last year since his departure.”

    In January, a New York judge fined the Trump Organization $1.6 million – the maximum possible penalty – for running a decade-long tax fraud scheme, a symbolic moment because it is the only judgment for a criminal conviction that has come close to the former president.

    Two Trump entities, The Trump Corp. and Trump Payroll Corp., were convicted last year of 17 felonies, including tax fraud and falsifying business records. Trump himself was never charged or convicted.

    On Sunday Pomerantz expanded on what evidence he believes they had against Trump, including Trump’s signature on a Deutsche Bank loan certifying that all of his financial statements were accurate.

    “He warrants that the financial statements are true and correct in all material respects. Finally of course on the guaranty is his sharpie signature, Donald J. Trump,” Pomerantz said. He also alleges he has documents proving Trump knew the accurate size of his 10,996-square-foot Fifth Avenue condominium, but lied anyways, claiming in 2015 and 2016 accounting documents that it was really 30,000 square feet.

    CNN previously reported that some prosecutors did not believe they had enough evidence to prove Trump’s intent and they lacked a credible narrator to explain how the financial statements were put together.

    In a letter to Pomerantz, Trump’s lawyer threatened legal action against the former prosecutor if he releases the book. The lawyer, Joe Tacopina, told CNN in a statement that Pomerantz’s “desperate attempt to sell books will cost him everything. Not to mention, it is clear that he was very much in the minority in his position that President Trump committed a crime.”

    In the book, which publishes on Tuesday, Pomerantz compares Trump to John Gotti, the head of the Gambino organized crime family, according to an advanced copy obtained by The New York Times, and lays out the complicated investigation that saw many close to the former president charged with crimes.

    Meanwhile, Bragg’s office last week accelerated its investigation into Trump’s alleged role in a hush money payment made to silence adult film star Stormy Daniel’s allegations of an affair. Trump has denied the affair.

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  • More than 400 products including breakfast sandwiches and fruit cups recalled due to possible Listeria contamination | CNN

    More than 400 products including breakfast sandwiches and fruit cups recalled due to possible Listeria contamination | CNN

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    CNN
     — 

    More than 400 food products sold under dozens of brand names were recalled due to possible Listeria contamination, the US Food and Drug Administration announced Friday.

    The recall by Fresh Ideation Food Group LLC includes ready-to-eat sandwiches, salads, yogurts, wraps and other products sold in nine states and Washington, DC, from January 24 through January 30.

    The Baltimore company said Friday that no illnesses have been reported so far.

    “The recall was initiated after the company’s environmental samples tested positive for Listeria monocytogenes,” Fresh Ideation Food Group said in its recall announcement.

    Eating Listeria-contaminated food can cause a serious infection that can lead to symptoms including fever, headache, diarrhea and vomiting, according to the US Centers for Disease Control and Prevention.

    It’s most likely to sicken pregnant women and their newborns, adults aged 65 or older, and people with weakened immune systems, according to the CDC. “An estimated 1,600 people get listeriosis each year, and about 260 die,” the agency says.

    The recalled foods were distributed in Connecticut, the District of Columbia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia, according to the FDA.

    The products – which included items like bacon, egg and cheddar muffins, breakfast croissants, tuna and chicken sandwiches, and fruit cups – were sold in stores, vending machines and by transportation providers, according to the company.

    “All recalled products have a Fresh Creative Cuisine label and/or identifier on the bottom of the label with the Fresh Creative Cuisine name and a fresh through or sell through date ranging from January 31, 2023 through February 6, 2023,” the company said.

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  • Gold giant Newmont’s $16.9 billion bid for Australia’s Newcrest clouded by deal doubts | CNN Business

    Gold giant Newmont’s $16.9 billion bid for Australia’s Newcrest clouded by deal doubts | CNN Business

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    Melbourne
    Reuters
     — 

    Top gold producer Newmont

    (NEM)     Corp said it had made a $16.9 billion offer for Australian peer Newcrest

    (NCMGF)     Mining to build a global gold behemoth, although investors and analysts said it undervalued the target amid a leadership change.

    Newcrest is seeking a new boss, with previous chief executive Sandeep Biswas having stepped down in December, while global interest rates are expected to peak this year and turn down, polishing the outlook for gold prices.

    The Australian gold miner said that it was considering the all-share proposal in a filing that was a response to media speculation over the weekend. The initial feedback from shareholders is that they want a higher price, according to a person familiar with Newcrest’s deliberations.

    “A good litmus test for a reasonably-priced deal is one where both seller and buyer feel somewhat aggrieved by selling out too low or by paying too much,” said Simon Mawhinney, chief investment officer at Allan Gray, Newcrest’s largest shareholder with a 7.36% stake. “It’s not clear to me that this kind of symmetry exists with these deal terms.”

    Newcrest shares surged as much as 14.4% to A$25.60 ($17.77), the highest since May 2022, but remained below the implied current offer price of $27.16, suggesting investors were not convinced the deal would pan out. Shares closed 9.3% higher at A$24.53.

    Newmont, which is already the world’s biggest gold producer by market capitalization and by ounces produced, said the combination represented “a powerful value proposition.”

    Newcrest’s operations include its top class Cadia asset in Australia, an expanding footprint in North America and Papua New Guinea, and growth potential in copper, highly prized as key to the energy transition. BHP

    (BBL)     Group offered $6.4 billion for Australian copper miner Oz

    (OZMLF)     Minerals Minerals in December.

    The Newmont proposal is via an agreed scheme of arrangement that would need to be recommended by the Newcrest board and subject to due diligence, various regulatory approvals and a shareholder vote that could stretch out for months.

    The indicative offer implies a 21% premium to Newcrest’s last closing value of A$22.45, materially below the traditional 30% takeover premium, noted analyst Jon Mills of Morningstar, which values Newcrest at about A$31 per share.

    Newcrest shareholders would receive 0.380 Newmont shares for every Newcrest share, giving them a 30% stake in the enlarged miner. It is a 4.7% improvement from a previous 0.363 per share offer that Newcrest already rejected for not providing enough value to shareholders, Newcrest disclosed on Monday.

    If investors don’t back the deal, the board will be under pressure to improve Newcrest’s value, perhaps by breaking out assets like Havieron and Telfer in Australia, or Lihir in Papua New Guinea, said Barrenjoey analyst Dan Morgan.

    Newcrest has been expected to announce a new chief executive this year after Biswas announced his retirement after eight years.

    Sherry Duhe, formerly chief financial officer, who joined Newcrest in February last year, is interim chief executive while a global internal and external search for a replacement is underway.

    Newcrest has been viewed as a target in recent years given its middling performance, but only a handful of buyers are big enough to take it out, said an investment banker who was not authorized to speak publicly about the matter.

    The all-share nature of the offer meant the timing is more likely to be linked to Newcrest’s leadership vulnerability than a big call on the gold price, but it probably also reflects a constructive view on the precious metal, the banker added.

    Risks are growing for gold to break higher, Morgan Stanley in a note on Jan. 16, noting that its macroeconomists were now forecasting lower rates and a weaker U.S. dollar, in tailwinds for the metal.

    Morgan Stanley is looking towards a bull case of spot gold reaching $2,160 in the fourth quarter, up from $1,866 an ounce.

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  • Judge reportedly allows Meta to move forward with VR startup acquisition, in blow to FTC | CNN Business

    Judge reportedly allows Meta to move forward with VR startup acquisition, in blow to FTC | CNN Business

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    CNN
     — 

    A federal judge will not block Meta from buying a virtual reality tech startup, according to multiple reports, in a setback for the US government, which had alleged the deal would threaten competition in a nascent market.

    Tuesday’s decision, issued by the US District Court for the Northern District of California, is sealed. But according to The Wall Street Journal and The New York Times, the contents of the decision dealt Meta a victory by denying the US government’s request for a preliminary injunction that would have prevented the acquisition from closing. The New York Times cited two people with knowledge of the matter and the Wall Street Journal cited one person familiar with the ruling.

    CNN has not independently confirmed the contents of the court’s decision. The Federal Trade Commission, which had sued to block the deal last summer, declined to comment. Meta declined to comment, and several outside attorneys for the company didn’t immediately respond to requests for comment.

    The closely watched case involves Meta’s purchase of Within Unlimited, a virtual reality company and maker of a VR fitness app called “Supernatural.” The FTC’s suit had been seen as a major test for Chair Lina Khan, a critic of large tech platforms, as well as of the FTC’s unusual legal theory alleging that Meta’s deal would harm future competition in a rapidly evolving industry.

    According to the reports, the judge in the case also issued a separate order that delays Meta’s ability to close its deal for another week to allow the FTC to decide whether to appeal the ruling.

    A separate challenge to Meta’s deal is ongoing before an in-house administrative law judge at the FTC. That proceeding could continue despite Tuesday’s ruling, but whether agency officials intend to press ahead is unclear.

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  • Apple is the only US tech giant to have avoided significant layoffs. Will it last? | CNN Business

    Apple is the only US tech giant to have avoided significant layoffs. Will it last? | CNN Business

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    CNN
     — 

    In less than three months, four of the big five US tech companies have cut tens of thousands of employees combined, shattering myths about the industry’s seemingly unstoppable growth in the process.

    But there has been one notable exception: Apple.

    To date, Apple

    (AAPL)     has not announced any substantial cuts, thanks in part to slower headcount growth than some of its peers during the pandemic and continued demand for its core products. Some analysts think more modest cost cuts could be coming, however.

    The iPhone maker is set to report earnings results for the final three months of 2022 on Thursday after the bell. It is expected to post a rare year-over-year decline in revenue.

    While these expectations show the strain Apple’s business is under, Wedbush Securities’ Dan Ives said in a note this week that pent-up demand for upgrading iPhones remains strong. “Apple will likely cut some costs around the edges, but we do not expect mass layoffs from Cupertino this week,” Ives wrote.

    Tom Forte, a senior research analyst at DA Davison, agreed there will be staff reductions, but likely not as drastic as those at other large tech companies. “Apple will cut headcount,” he said in a recent interview on Bloomberg TV, but suggested the cuts would come through attrition or reductions at the retail level.

    “While they haven’t done so yet, like everyone else, they will adjust their headcount for the current level of demand,” he said.

    Fueled by a surge in demand for digital products earlier in the pandemic, Big Tech went on a massive hiring spree.

    Amazon

    (AMZN)     and Meta each doubled their headcount between the third quarter in 2019 and the third quarter 2022, according to data shared in the companies’ securities filings. Alphabet, meanwhile, grew its headcount 64% during that time, and Microsoft grew its staff by more than 50% over approximately the same period.

    Apple, by comparison, grew its headcount by a more modest 20%. As of September 2022, Apple said it had approximately 164,000 full-time employees.

    Many tech CEOs, with varying degrees of remorse, have blamed over-hiring in the early days of the pandemic for the mass layoffs now. As pandemic restrictions eased last year, the demand for digital services shifted back toward pre-pandemic levels. Inflation pinched consumer and business spending, and rising interest rates evaporated the easy money tech companies had tapped into. And one-by-one, amid the whiplash, household names in Silicon Valley began announcing widespread layoffs to adjust to the new environment.

    While Apple has not announced layoffs, its business has been strained in other ways. Like other Big Tech companies, it has faced threats of antitrust action in the United States and EU. Earlier this month, Apple also said CEO Tim Cook had agreed to a massive pay cut this year, following a shareholder vote on his compensation package after its stock fell about 27% in 2022.

    As consumer spending tightened, global smartphone shipments plunged 18% in the fourth quarter of 2022, according to market research firm Canalys. Apple’s business also faced supply chain hurdles linked to China’s Covid lockdowns and unrest that hit a key production site in Zhengzhou, China late last year.

    Still, Apple’s business is weathering the downturn better than some of its fellow tech giants. In its most-recent earnings report, the company reported sales grew 8% year-over-year and that the company hit a September quarter revenue record for iPhone.

    Thursday’s earnings results will show whether Apple can keep defying gravity.

    “Apple continues to innovate with high-quality, industry-leading products supported by a powerful digital platform,” analysts at Monness, Crespi and Hardt wrote in an investor note Tuesday. “However, regulatory headwinds persist and we believe the darkest days of this downturn are ahead of us.”

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  • Shell profits double to record $40 billion | CNN Business

    Shell profits double to record $40 billion | CNN Business

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    Hong Kong/London
    CNN
     — 

    Shell made a record profit of almost $40 billion in 2022, more than double what it raked in the previous year after oil and gas prices soared following Russia’s invasion of Ukraine.

    Europe’s largest oil company by revenue reported adjusted full-year earnings of $39.9 billion on Thursday — more than double the $19.3 billion it posted in 2021 — driven by a strong performance in its gas trading business. The company’s stock was up 1.7% in London.

    The company reported $9.8 billion in profit in the fourth quarter. Just over 40% of Shell’s full-year earnings came from its integrated gas business, which includes liquified natural gas trading operations.

    Shell CEO Wael Sawan said the results “demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.”

    The earnings are the latest in a series of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of soaring oil and gas prices.

    ExxonMobil this week posted record full-year earnings of $59.1 billion. Last month, Chevron

    (CVX)     reported a record full-year profit of $36.5 billion.

    That has led to renewed calls for higher taxation. Governments in the European Union and the United Kingdom have already imposed windfall taxes on oil company profits, with the proceeds used to help households struggling with rising energy bills.

    Shell said it expected to pay an additional $2.3 billion in tax related to the EU windfall tax and the UK energy profits levy. The company paid $13 billion in tax globally in 2022.

    Shell

    (RDSA)     also announced another $4 billion share buyback program and confirmed it would lift its dividend per share by 15% for the fourth quarter.

    — This is a developing story and will be updated.

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