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Tag: Corporate Strategy/Planning

  • WeWork flags ‘substantial doubt’ about its ability to stay in business

    WeWork flags ‘substantial doubt’ about its ability to stay in business

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    WeWork Inc. disclosed Tuesday that there’s “substantial doubt” about its ability to continue operating, as the company seeks to improve its financial positioning.

    Shares of the company, which provides co-working spaces, were down 33% in Tuesday’s after-hours trading.

    WeWork
    WE,
    -5.50%
    lost $397 million in the second quarter and has $680 million of liquidity. In light of its losses and expected cash needs, “substantial doubt exists about the company’s ability to continue as a going concern,” WeWork said in its second-quarter earnings release.

    Its ability to continue “is contingent upon successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”

    See also: Proterra stock craters as electric-bus maker files for Chapter 11 bankruptcy

    As part of that liquidity planning, WeWork will aim to cut its rent and tenancy costs through restructuring as a renegotiation of lease terms. The company is also looking to boost revenue by lowering member churn, and it will try to rein in expenses and capital expenditures. Finally, WeWork is seeking additional capital through the issuance of debt or equity, or via asset divestitures.

    The company was a hot technology player before the pandemic, enabling businesses to obtain flexible arrangements for workspaces, but it’s struggled to find its footing again now that companies and employees have become more comfortable with remote work.

    WeWork’s losses narrowed in the latest quarter, though they were still sizable, as the company logged a net loss of $397 million, or 21 cents a share, compared with a loss of $635 million, or 76 cents a share, in the year-prior period. The FactSet consensus was for a 12-cent loss per share, based on three estimates.

    The company also managed to grow revenue in its latest quarter, bringing in an $844 million haul on the top line, up from $815 million a year earlier, though analysts had been looking for $850 million.

    “The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real-estate portfolio optimization efforts, and maintaining a disciplined approach to reducing operating costs,” Interim Chief Executive David Tolley said in a release.

    The company’s prior CEO stepped down in May.

    See more: WeWork bonds sink after top executives resign from cash-burning company

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  • Tupperware stock soars 90% after debt restructuring agreement

    Tupperware stock soars 90% after debt restructuring agreement

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    Tupperware Brands Corp.’s stock climbed more than 90% in extended trading Thursday after the beleaguered maker of iconic food containers announced a debt restructuring agreement.

    The surge sent the stock hurtling toward a nine-month high. In a statement released after market close, Tupperware
    TUP,
    -4.09%
    said that it has finalized an agreement with its lenders to restructure its existing debt obligations. The agreement will improve the company’s overall financial position by amending certain credit obligations and extending the maturity of certain debt facilities to allow it to continue with its turnaround efforts, Tupperware said.

    The agreement provides for the reduction/reallocation of $150 million in interest and fees, and an extension of the stated maturity of approximately $348 million of principal and reallocated interest and fees to fiscal year 2027 with payment-in-kind, or PIK, interest.

    Related: Tupperware and Yellow have skyrocketed, but don’t confuse them with meme stocks

    Tupperware also announced the reduction of amortization payments required to be paid through fiscal year 2025 by approximately $55 million, and immediate access to a revolving borrowing capacity of approximately $21 million.

    “I am confident that this agreement provides us with the financial flexibility to continue executing on our near-term turnaround efforts as well as our long-term strategy to create a global omni-channel consumer brand,” Tupperware CFO Mariela Matute said in the statement. “We are committed to making ongoing progress in improving liquidity and strengthening our capital structure. We appreciate the support of our lenders, who share in our strategy, as we move forward.”

    Related: How ‘left-for-dead’ Tupperware became a buzzy trading play

    In April, Tupperware issued a going-concern warning, essentially cautioning that it could go bust. The beleaguered company also announced the hiring of financial advisers to help it navigate its near-term challenges. On July 7, Tupperware said that it had entered a waiver agreement with some of its creditors.

    Also on Thursday, Tupperware said that its second-quarter earnings report will be filed late. In an SEC filing, Tupperware explained that it is unable to file its report for the quarter ended July 1 by the prescribed due date. Tupperware cited “the time and effort” required to complete its consolidated financial statements for its Form 10-K annual report for the fiscal year ended Dec. 31, 2022 and the Form 10-Q for the quarter ended April 1, 2023. “The company will be unable, without unreasonable effort or expense, to complete and file the Q2 Form 10-Q within the prescribed time period,” it said. “As previously disclosed on its Form 8-K on April 7, 2023, the Company is continuing its restatement of previously issued financial statements and the financial statement close process for the year ended December 31, 2022.”

    Since the 8-K filing, Tupperware has “identified additional prior period misstatements and additional material weaknesses in internal control over financial reporting,” the company said. The April 7 8-K filing also disclosed the company’s “substantial doubt” about Tupperware’s ability to continue as a going concern. “While the Company is still completing its second-quarter 2023 financial close process, it expects that its Q2 Form 10-Q will reflect a material decline in revenues for the quarter ended July 1, 2023 as compared to the quarter ended June 25, 2022,” Tupperware said in the filing. “The Company believes that its preliminary estimated revenue results for the quarter ended July 1, 2023 will be within the range of $260-$270 million.”

    Related: Tupperware stock skyrockets to a record 434% gain in July

    Tupperware’s stock has skyrocketed recently, despite a dearth of fresh news. Nonetheless, Tupperware should not be confused with a meme stock, according to Samantha LaDuc, founder of LaDucTrading.com. Tupperware’s recent trading activity is also reminiscent of spikes in other names also recently seen as “left for dead,” as  LaDuc put it to MarketWatch last week.

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  • Microsoft earnings top estimates, but stock falls as execs detail AI’s costs

    Microsoft earnings top estimates, but stock falls as execs detail AI’s costs

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    Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading Tuesday after the company discussed the year ahead.

    The technology giant has won favor on Wall Street for its positioning in the artificial-intelligence revolution, though Chief Financial Officer Amy Hood said on Tuesday’s earnings call that “even with strong demand and a leadership position,” Microsoft’s
    MSFT,
    +1.70%
    “growth from our AI services will be gradual.” Microsoft’s AI for its Azure cloud-computing business needs to ramp, and the company is working toward the general availability of its Copilot productivity product.

    Microsoft’s AI revenue impacts will thus be weighted toward the second half of the new fiscal year that just began, she continued. Meanwhile, she expects that Microsoft’s capital expenditures will rise sequentially each quarter “as we scale to meet demand signals.”

    Hood’s commentary came as Microsoft posted fiscal fourth-quarter results Tuesday afternoon that showed a 15% jump in revenue for the company’s cloud-computing segment, which it calls Intelligent Cloud. Revenue for the segment came in at $24.0 billion, while analysts had been anticipating $23.8 billion. The growth rate was 17% on a currency-neutral basis.

    The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. Microsoft’s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The FactSet consensus was for 27% growth in constant currency.

    “While we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,” Evercore ISI analyst Kirk Materne said in a note to clients.

    For the September quarter, Microsoft anticipates 25% to 26% in constant-currency Azure growth.

    The cloud migration is still in the “early innings,” Chief Executive Satya Nadella said on the call, while also highlighting a “new world of AI driving a set of new workloads.”

    “We think of that, again, being pretty expansive from a TAM [total addressable market] opportunity and we’ll play it out,” he continued, though the company is also up against the “law of large numbers” given the massive scale of its cloud business.

    The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. Analysts tracked by FactSet were modeling $2.55 a share.

    Overall revenue for Microsoft climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion.

    See also: Microsoft bulls are excited as company reveals pricing for AI offering

    Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. That part of the business includes LinkedIn and both commercial and consumer versions of Office. Analysts had been looking for $18.1 billion.

    Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. The FactSet consensus was for $13.6 billion.

    Nadella, meanwhile, expressed optimism about the eventual opportunities brought upon by Microsoft’s Copilot offerings.

    “I do think people are going to look at how can they complement their [operating-expense] spend with essentially these Copilots in order to drive more efficiency and, quite frankly, even reduce the burden and drudgery of work on their OpEx and their people and so on,” he said.

    Evercore’s Materne called the overall results “solid” amid “a lot of macro headwinds.”  Microsoft’s investment story “gets stronger in [the second half of the calendar year] as some optical headwinds reverse and [comparisons] soften, and Microsoft’s position in the enterprise market continues to get stronger as customers look to consolidate spending,” he wrote.

    Read: Amazon finally is nearing a bottom on this key measure, analyst says

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  • Il Makiage parent Oddity Tech’s stock rockets out of the gate in trading debut

    Il Makiage parent Oddity Tech’s stock rockets out of the gate in trading debut

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    “We want to build something huge.”

    That’s Lindsay Drucker Mann, chief financial officer of Oddity Tech, the Israeli digital consumer technology platform for the beauty and wellness market that started trading on Nasdaq on Wednesday.

    The stock
    ODD,
    +38.23%
    soared 38% out of the gate after the company’s initial public offering priced above its proposed range. The deal was also upsized in another sign of strong demand.

    “We’ve unlocked online one of the most attractive and lucrative TAMs on the planet,” said the CFO, referring to the sector’s total addressable market. The beauty industry is worth an estimated $600 billion and is still dominated by bricks-and-mortar retailers.

    “The encumbents are amazing megacap businesses that have built so much value over time,” said Drucker Mann. “But we believe the consumer has moved on and that we’re building the future of the category.”

    The company, which was founded by Israeli sister-brother team Oran Holtzman, who is chief executive, and Shiran Holtzman-Erel, who is chief product officer, is confident its high-tech approach to the beauty business gives it a strong advantage.

    For more, see: Il Makiage parent Oddity Tech is going public: 5 things to know about the Israeli digital beauty company

    Oddity harnesses data science, machine learning and computer vision and artificial intelligence to allow its customers identify the correct products, formulations and shades, and it owns patented software that allows them to do it using their smartphones.

    The company acquired Voyage 81 in 2021, a company that has developed software that can provide hyperspectral information.

    Simply put, the eye can only see three colors — red, green and blue — but there are many more colors on smaller wavelength bands that remain invisible. Technology developed by NASA can extract that information but the hardware is expensive at a cost of $20,000 or more.

    The Voyage81 software can extract the same information and bring it to all devices, allowing consumers to see more colors.

    “We can analyze skin and hair features, detect facial blood flows and more. We’re building a whole new suite of tools to harness that power,” said Drucker Mann.

    The results are impressive. The company’s first brand, Il Makiage, which was launched in 2018, was the fastest-growing global beauty direct-to-consumer platform from 2020 through 2022, says the prospectus, citing trade magazine Women’s Wear Daily.

    Il Makiage was also the fastest-growing digital, direct-to-consumer beauty brand in the U.S. through 2021, says the IPO prospectus, citing data from Digital Commerce 360, which is its most recent available.

    The second brand, SpoiledChild, launched in 2022 with the goal of disrupting the wellness category online, and is scaling even faster, said Drucker Mann.

    The company now has more than 40 million users on the platform that have generated more than 1 billion data points on their beauty preferences. As of end-March, Oddity had more 4 million active customers, or customers that had made at least one purchase in the last year.

    “Our business is unique in that it’s a company that’s growing and as young as we are and in tech, we’re profitable from very early on,” said Drucker Mann. “We have generated significant Ebitda margins and cash flow and so we have more than $100 million of cash on our balance sheet from earnings, and not from a capital raise.”

    The company plans to use the proceeds from today’s deal to develop new products and expand into new markets. Some of those products will come out of Oddity Labs, which it set up in April to bring AI-based molecule discovery to beauty and wellness.

    Brands three and four are in the works, although Drucker Mann is unable to offer details just yet.

    “There are so many pain points that consumers have told us about so we’re developing products to address those,” she said.

    The executive’s background as a Goldman Sachs banker made her passionate about companies and consumer products, understanding how a company works and what makes a business succeed.

    “Getting global capital markets behind us when the business has never been stronger is making us excited as we look at 2024 and beyond,” she said.

    The Renaissance IPO ETF
    IPO,
    +0.29%
    has gained 45% in the year to date, while the S&P 500
    SPX,
    +0.32%
    has gained 19%.

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  • Meta’s Twitter-rival Threads: How to sign up, what it costs and what we know so far

    Meta’s Twitter-rival Threads: How to sign up, what it costs and what we know so far

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    Meta’s Twitter-rival Threads launches tomorrow: What we know so far

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  • Yahoo CEO says the company plans a return to the public markets

    Yahoo CEO says the company plans a return to the public markets

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    Yahoo, an early trailblazer of the Internet boom, is “very profitable,” and ready to return to public markets via an initial public offering.

    That’s according to Chief Executive Jim Lanzone, who made the comment in an interview with the Financial Times published Tuesday. Yahoo soared to prominence in the 1990s, rising in the public consciousness alongside its share price — under the ticker symbol “YHOO” — during the dot-com boom.

    Apollo Funds purchased the Yahoo business from Verizon Communications Inc. 
    VZ,
    +0.24%
     in 2021.

    IPO Report: Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

    The web services provider, which competes with the likes of Google parent Alphabet Inc. 
    GOOGL,
    +0.17%
    and Facebook parent Meta Platforms Inc. 
    META,
    -0.33%    ,
    said earlier this year that more than 20% of its workforce would be laid off. At the time, Lanzone reportedly said that the cuts would be made in an unprofitable area of its business but that they would be “tremendously beneficial” to the company overall.

    “Whether it’s finance, or sports or news, that’s still what we do, and why we’re No. 1, or No. 2, in all these important categories all these years later,” Lanzone reportedly told the FT. “While the company has had struggles [at] different points in time, we’re still huge in traffic, and we have our best days ahead of us productwise.”

    He said Yahoo would be aggressively looking at the chance to build businesses in related sectors via M&A — it recently bought Wagr, a sports-betting app. While Yahoo is still “too small” to take on Google and Microsoft’s
    MSFT,
    -0.75%
    search engine Bing, Lanzone said he’s optimistic, and also sees AI offering up new opportunities for the company.

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  • Cummins spinoff Atmus Filtration’s stock soars 14% in trading debut

    Cummins spinoff Atmus Filtration’s stock soars 14% in trading debut

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    Atmus Filtration Technologies Inc.’s stock soared 14% Friday in its trading debut, after the Cummins Inc. spinoff priced its initial public offering in the middle of its proposed price range.

    The Nashville, Tenn.-based company sold 14.1 million shares priced at $19.50 each to raise $275 million. With 83.3 million shares to be outstanding after the deal, the company’s valuation is $1.6 billion.

    The stock
    ATMU,
    +11.90%
    is trading on the New York Stock Exchange under the ticker ATMU. Goldman Sachs and JPMorgan Chase were lead book-running managers on the deal, with 10 other banks acting as co-managers.

    Although the company is issuing primary shares, Atmus will not receive any of the IPO proceeds; all of the proceeds will go to debt-for-equity exchange parties, namely underwriters Goldman Sachs and JPMorgan, and will indirectly pay down parent Cummins’
    CMI,
    +1.03%
    debt, according to the filing documents.

    Atmus makes products for on-highway commercial vehicles and off-highway agriculture, construction, mining and power-generation vehicles and equipment, mostly under the Fleetguard brand. The company had pro forma net income of $34.9 million in the first quarter on sales of $418.6 million.

    About 16% of its 2022 sales went to original-equipment manufacturers, where its filters are used for new vehicles and equipment, and about 84% were aftermarket sales.

    The company was created by Cummins, a maker of diesel and natural-gas engines, in 1958.

    The IPO comes in a thin year for deals. There have been just 44 IPOs this year to raise $7.3 billion in proceeds, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research.

    That’s up 29.4% from the same period in 2022, when deal flow slowed to its lightest in decades.

    “Deal flow started at a decent pace but failed to pick back up after the February lull, as hawkish signals from the Fed, renewed recession fears, and turmoil within the banking industry caused a spike in volatility,” Renaissance wrote in April commentary.

    The biggest deal of the year to date was that of Kenvue Inc.
    KVUE,
    -0.11%    ,
    a spinoff from Johnson & Johnson
    JNJ,
    +0.14%    ,
    which is parent to a number of household brands, including Tylenol, Band-Aid, Listerine and Benadryl.

    For more, see: Kenvue stock cheered in Wall Street debut, as Tylenol and Band-Aid brand parent is valued at $48 billion

    Kenvue raised $3.8 billion after pricing above range and achieving a valuation of $41 billion.

    The Renaissance IPO ETF
    IPO,
    +2.06%
    has gained 18% in the year to date, while the S&P 500
    SPX,
    +1.34%
    has gained 9%.

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  • Cineworld’s Proposed Restructuring Now Backed by Most Lenders — Update

    Cineworld’s Proposed Restructuring Now Backed by Most Lenders — Update

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    By Joe Hoppe

    Cineworld Group said Thursday that its proposed restructuring has the backing of lenders controlling almost all of its legacy credit lines and most of the outstanding debt under its debtor-in-possession facility.
    

    

    The London-based cinema company–which owns Regal Cinemas–said more lenders under its term loans due in 2025 and 2026 and revolving credit line due this year, have agreed to amended and restated versions of the restructuring support agreement and the backstop commitment agreement, first filed in early April in the U.S. Bankruptcy Court.
    

    Now, the proposed restructuring has support of those holding and controlling 99% of the legacy credit lines and at least 69% of the outstanding indebtedness under the debtor-in-possession facility, the company said.
    

    The proposed restructuring is expected to reduce indebtedness by around $4.53 billion, raise $800 million and provide $1.46 billion in new debt financing, the company said on April 3. The proposed restructuring doesn’t provide for any recovery for holders of Cineworld’s existing equity interests.
    

    Cineworld now expects to emerge from Chapter 11 bankruptcy in July. During the restructuring, the company has continued to operate its business and cinemas as usual, it said.
    

    Cineworld entered into Chapter 11 in September, with around $1.94 billion of debt, and had been in talks with stakeholders since then to develop a reorganization plan to maximize value. The company’s shares fell in late February after it said it had received a number of proposals from potential parties to buy some or all of its business, but none involve an all-cash bid for the entire company, leaving shareholders empty handed
    

    During its bankruptcy process, AMC Entertainment held discussions regarding a potential strategic acquisition of theaters and talks about reviving a previously scrapped merger with Cineplex were also held
    

    In early April, Cineworld said it had entered a restructuring support agreement and a backstop commitment agreement with some lenders. At the same time, Cineworld said the marketing process in the U.S., the U.K. and Ireland will be terminated. Proposals for the rest of the world business–outside of the U.S., the U.K. and Ireland–continued to be considered, it said.
    

    Write to Joe Hoppe at joseph.hoppe@wsj.com
    

    

    

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    From meme stocks to empty shelves: The top 5 reasons Bed Bath & Beyond failed
    
			
    From meme stocks to empty shelves: The top 5 reasons Bed Bath & Beyond failed
    
			
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    Bed Bath & Beyond went from homeware powerhouse to the retail doghouse over the course of the last decade. 
    

    But its final push into Chapter 11 bankruptcy protection Sunday resulted from a mix of bad decisions and forces beyond its control, the company explained in a new court filing. In the 93-page document, Holly Etlin, chief restructuring officer and chief financial officer of Bed Bath & Beyond BBBY, tried to explain how things went so wrong.  Here are the top five choices and moments that ultimately spelled the retailer’s…
    
    

    

    

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    Silvergate Capital stock tanks as company plans to wind down its crypto-friendly bank
    
			
    Silvergate Capital stock tanks as company plans to wind down its crypto-friendly bank
    
			
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    Silvergate Capital Corp.
    
        SI,
    
        -5.76%
    
       shares plunged more than 30% in after-hours trading Wednesday after the company said it intended to wind down operations and voluntarily liquidate its subsidiary Silvergate Bank, a crypto-friendly lender. 
    

    The stock’s plunge would take it to a record low if losses hold through regular trading Thursday.
    

    

    The La Jolla, Calif.-based lender made the announcement after it said last week in a regulatory filing that it was at risk of “being less than well-capitalized,” and discontinued its crypto-payments network.
    

    As one of the few crypto-friendly banks, the liquidation of Silvergate Bank points to uncertainty in the future relationships between crypto companies and banks, who play an essential role in the conversion of fiat currencies into crypto. 
    

    Read: Crypto traders may lean toward stablecoins after Silvergate ceases crypto payments network 
    

    Silvergate Bank’s liquidation plan includes full repayment of all deposits, according to a statement Wednesday. 
    

    The company is considering the best way to resolve claims and preserve the residual value of its assets, Silvergate Capital said. All of the company’s other deposit-related services remain operational, it said. 
    

    Silvergate also said it hired Centerview Partners as financial adviser and Cravath, Swaine & Moore LLP as legal adviser.
    

    Several crypto companies, such as Coinbase Global Inc.
    
        COIN,
    
        +1.81%    ,
    
       Galaxy Digital, Paxos and Circle, said last week that they would cease some or all payment transactions with Silvergate Bank.
    

    Representatives at Silvergate didn’t immediately respond to a request seeking comment. 
    

    Signature Bank
    
        SBNY,
    
        -1.47%    ,
    
       another crypto-friendly lender, saw its shares slide 3.7% in after-hours trading Wednesday. 
    

    Major cryptocurrencies were steady Wednesday. Bitcoin
    
        BTCUSD,
    
        -1.30%
    
       lost 0.3% to around $21,981, while ether
    
        ETHUSD,
    
        -1.12%
    
       gained 0.2% to about $1,550, according to CoindDesk data. 
    

    Read: Here’s the real challenge facing Silvergate and other ‘crypto banks,’ says this short seller 
    

    

    

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    Bed Bath & Beyond to Shut Down Canadian Stores in Bankruptcy
    
			
    Bed Bath & Beyond to Shut Down Canadian Stores in Bankruptcy
    
			
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     Bed Bath & Beyond Inc.’s  Canadian division will shut down its stores under court protection after the company received an unusual lifeline earlier this week to save its U.S. operations from bankruptcy.
    

    The troubled retailer filed its Canadian division for protection under the Companies’ Creditors Arrangement Act, Canada’s rough equivalent of chapter 11 bankruptcy. Bed Bath & Beyond has “reluctantly concluded” that even with the lifeline of its recent equity raise, there isn’t enough capital available both to restructure its U.S. business and bring the Canadian business to profitability, the company said in filings with an Ontario court.
    

    

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    GE’s Larry Culp Has a Message for Investors
    
			
    GE’s Larry Culp Has a Message for Investors
    
			
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    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
    

    https://www.barrons.com/articles/ge-larry-culp-investors-annual-letter-83f4e20b
    

    

    

    

    

    

    

    

      

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    Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss
    
			
    Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss
    
			
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    Meta Platforms Inc. shares soared in after-hours trading Wednesday despite an earnings miss, as the Facebook parent company guided for potentially more revenue than Wall Street expected in the new year and promised more share repurchases amid cost cuts.  
    

    Meta
    
        META,
    
        +2.79%
    
       said it hauled in $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago but stronger than expectations. Earnings were $4.65 billion, or $1.76 a share, compared with $10.3 billion, or $3.67 a share, last year.
    

    

    Analysts polled by FactSet expected Meta to post fourth-quarter revenue of $31.55 billion on earnings of $2.26 a share, and the beat on sales coincided with a revenue forecast that also met or exceeded expectations. Facebook Chief Financial Officer Susan Li projected first-quarter sales of $26 billion to $28.5 billion, while analysts on average were projecting first-quarter sales of $27.2 billion.
    

    Shares jumped more than 19% in after-hours trading immediately following the release of the results, after closing with a 2.8% gain at $153.12. 
    

    Alphabet Inc.’s
    
        GOOGL,
    
        +1.61%
    

            GOOG,
    
        +1.56%
    
       Google and Pinterest Inc.
    
        PINS,
    
        +1.56%
    
       benefited from Meta’s results, with shares for each company rising more than 4% in extended trading Wednesday.
    

    “Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”
    

    Read more: Snap suffers worst sales growth yet in holiday quarter, stock plunges after earnings miss
    

    Facebook’s 2 billion-user milestone was slightly better than analysts expected for user growth on Meta’s core social network. Daily active users across all of Facebook’s apps neared, but did not crest, another round number, reaching 2.96 billion, up 5% from a year ago.
    

    Meta has been navigating choppy ad waters as it copes with increasing competition from TikTok and fallout from changes in Apple Inc.’s
    
        AAPL,
    
        +0.79%
    
       ad-tracking system in 2021 that punitively harmed Meta, costing it potentially billions of dollars in advertising sales. Meta has invested heavily in artificial-intelligence tools to rev up its ad-targeting systems and making better recommendations for users of its short-video product Reels, but it laid off thousands of workers after profit and revenue shrunk in recent quarters.
    

    The cost cuts seemed to pay off Wednesday. While Facebook missed on its earnings, it noted that the costs of its layoffs and other restructuring totaled $4.2 billion and reduced the number by roughly $1.24 a share. 
    

    Meta executives said they now expect operating expenses to be $89 billion to $95 billion this year based on slower salary growth, cost of revenue, and $1 billion in savings from facilities consolidation — down from previous guidance for $94 billion to $100 billion. Capital expenditures are expected to be $30 billion to $33 billion, down from previous guidance of $34 billion to $37 billion, as Meta cancels multiple data-center projects.
    

    In a conference call with analysts late Wednesday, Zuckerberg called 2023 the “year of efficiency” after 18 years of unbridled growth. He recommitted to Meta’s emphasis on AI and the metaverse, a platform for “better social experiences” than the phone, he said.
    

    “The reduced outlook reflects our updated plans for lower data-center construction spend in 2023 as we shift to a new data-center architecture that is more cost efficient and can support both AI and non-AI workloads,” Li said in her outlook commentary included in the release.
    

    Meta expects to increase its spending on its own stock. The company’s board approved a $40 billion increase in its share-repurchase authorization; Meta spent nearly $28 billion on its own shares in 2022, and still had nearly $11 billion available for buybacks before that increase.
    

    “Investors are cheering Meta’s plans to return more capital to shareholders despite worries over rising costs related to its metaverse spending,” said Jesse Cohen, senior analyst at Investing.com.
    

    “At first glance…Meta getting its mojo back,” Baird Equity Research analyst Colin Sebastian said in a note late Wednesday. “Results and guidance look particularly solid after Snap’s dismal report; however, further cuts to operating and capital expenditures announced this afternoon were perhaps the biggest surprise.”
    

    UBS analyst Lloyd Walmsley said he anticipates double-digit revenue growth exiting 2023 and strong growth in earnings and free cash flow.
    

    The  results came a day after Snap Inc.
    
        SNAP,
    
        -10.29%
    
       posted fourth-quarter revenue of $1.3 billion, flat from a year ago and the worst year-over-year sales growth Snap has ever reported. But they also arrived on the same day Facebook scored a major win in a California court. The company successfully fended off the Federal Trade Commission bid to win a preliminary injunction to block Meta’s planned acquisition of VR startup Within Unlimited.
    

    Read more: Meta wins bid to buy VR startup Within Unlimited, beating U.S. FTC in court: report
    

    Meta shares have plunged 53% over the past 12 months, while the broader S&P 500 index 
    
        SPX,
    
        +1.05%
    
       has tumbled 10% the past year.
    

    

    

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    J&J Can’t Use Bankruptcy to Resolve Talc-Injury Lawsuits, Appeals Court Rules
    
			
    J&J Can’t Use Bankruptcy to Resolve Talc-Injury Lawsuits, Appeals Court Rules
    
			
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    A federal appeals court rejected  Johnson & Johnson ‘s plan to use a legal strategy to push about 38,000 talc lawsuits into bankruptcy court, hampering the controversial tactic the company and a handful of other profitable businesses have used to move mass personal-injury cases to chapter 11.
    

    The Third U.S. Circuit Court of Appeals on Monday dismissed the chapter 11 case of J&J subsidiary LTL Management LLC, which the consumer-health-goods giant created in 2021 to move to bankruptcy court the mass lawsuits alleging its talc-based baby powder products caused cancer.
    

    

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    Hasbro plans to lay off 15% of workforce and warns of holiday-season loss
    
			
    Hasbro plans to lay off 15% of workforce and warns of holiday-season loss
    
			
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    Hasbro Inc. late Thursday said it plans to lay off about 15% of its workforce and warned Wall Street to brace for a quarterly loss and a drop in revenue after a disappointing holiday season. 
    

    Hasbro
    
        HAS,
    
        -0.50%
    
       reported preliminary losses between $1 a share and 93 cents a share for its fourth quarter, and an adjusted loss of between $1.29 a share and $1.31 a share in the period. 
    

    

    That runs counter to FactSet consensus of an adjusted profit of $1.52 a share for the quarter.
    

    The maker of My Little Pony, Baby Alive and other toy brands also reported preliminary fourth-quarter revenue of about $1.68 billion, down 17% year-over-year. That compares with FactSet consensus for revenue of $1.92 billion for the quarter.
    

    Hasbro stock fell more than 8% in the extended session after ending the regular trading day down 0.5%.
    

    Hasbro’s “consumer-products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” despite “strong growth” for digital gaming and other areas of the company, Chief Executive Chris Cocks said in a statement. 
    

    Several retailers have posted lower-than-expected fourth-quarter sales as concerns about the economy simmer. Layoffs have also been widespread, with International Business Machines Corp.
    
        IBM,
    
        -4.48%
    
       and SAP
    
        SAP,
    
        -1.77%
    
       among the latest announcing cuts. 
    

    The global job cuts will start in the next few weeks, Hasbro said. The toy maker employed 6,640 people worldwide as of December 2021, according to its most recent annual filing with securities regulators. 
    

    Hasbro said that the layoffs and “ongoing systems and supply-chain investments” will keep the company on track to hit its goal of between $250 million and $300 million in cost savings by the end of 2025. 
    

    Until then, however, 2022 and “particularly” the fourth quarter were a “a challenging moment for Hasbro,” the company said. 
    

    Earlier this month, analysts at BMO said they expected Hasbro’s holiday-season sales were likely among “the weakest in the North American toy industry.” 
    

    Hasbro’s stock has fallen about 29% in the last 12 months, compared with a decline of around 7% for the S&P 500 index
    
        SPX,
    
        +1.10%    .
      
    

    

    

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    SAP to cut nearly 3,000 Jobs, weighs Qualtrics stake sale
    
			
    SAP to cut nearly 3,000 Jobs, weighs Qualtrics stake sale
    
			
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    SAP profit, revenue fall short of forecasts, plans to cut 2,800 jobs
    

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    AT&T stock moves higher after earnings as subscriber growth story continues
    
			
    AT&T stock moves higher after earnings as subscriber growth story continues
    
			
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    Shares of AT&T Inc. were rising in premarket trading Wednesday after the company swung to a loss upon taking restructuring charges, but beat earnings expectations on an adjusted basis and showed continued subscriber growth in its fourth quarter.
    

    The company posted a loss from continuing operations of $23.1 billion, or $3.20 a share, whereas it earned $5.2 billion, or 66 cents a share, a year-earlier. The loss includes $3.57 cents a share of non-cash impairment, abandonment, and restructuring charges, among other factors. 
    

    …
    
    

    

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    Crypto lender Genesis latest to file for bankruptcy as crypto contagion continues to spread
    
			
    Crypto lender Genesis latest to file for bankruptcy as crypto contagion continues to spread
    
			
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    Embattled crypto lender Genesis announced that it had filed for bankruptcy late Thursday, the latest firm to be taken amid a widespread rout among crypto companies driven by plunging prices and charges of fraud at major players like FTX.
    

    Genesis, which froze customer withdrawals in November following the collapse of FTX, filed for Chapter 11 bankruptcy protection in federal court in Manhattan for its lending units, saying it was the best way for it to achieve “an optimal outcome for Genesis clients.”
    

    

    “While we have made significant progress refining our business plans to remedy liquidity issues caused by the recent extraordinary challenges in our industry, including the default of Three Arrows Capital and the bankruptcy of FTX, an in-court restructuring presents the most effective avenue through which to preserve assets and create the best possible outcome for all Genesis stakeholders,” said Derar Islim, Genesis’ interim chief executive, in a statement on the company’s website.
    

    According to its bankruptcy filing, Genesis’ lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion and had over 100,000 creditors. The firm said it had about $150 million in cash on hand to support its operations during restructuring.
    

    Among those creditors is Gemini, the crypto exchange founded by twin brothers Cameron and Tyler Winklevoss in 2014, that had $900 million of its customers’ money tied up with Genesis.
    

    Genesis was the main partner of Gemini’s “earn” program, in which its retail investors received payments for allowing their crypto assets to be loaned out to others. 
    

    Cameron Winklevoss welcomed Genesis’ bankruptcy filing, saying it would provide Gemini a better venue for getting its clients’ money back.
    

    “We will use every tool available to us in the bankruptcy court to maximize recovery for Earn users and any other parties within the bankruptcy court’s jurisdiction,” he wrote in a post on Twitter.
    

    Both Genesis and Gemini were charged by the Securities and Exchange Commission last week with illegally selling securities to investors through the Earn program. 
    

    Genesis and its parent company, Digital Currency Group, had said they were seeking outside investment to help bolster the books and pay customers back in the months before filing for bankruptcy.
    

    As part of its restructuring, Genesis said it would seek to possibly sell the company and also continue to look for additional investment.
    

    Shares of bitcoin
    
        BTCUSD,
    
        +0.12%
    
       were little changed at just above $20,000. There have been some concerns that the announcement of another crypto bankruptcy could unravel a recent recovery for the No. 1 cryptocurrency, up 25% so far in 2023. That puts it back above levels seen before FTX imploded last November.
    

    

    

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    Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group
    
			
    Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group
    
			
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    Shares of Alibaba Group Holdings are higher following news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant.
    

    Alibaba’s Hong Kong-listed shares
    
        9988,
    
        +7.78%
    
       advanced as much as 8.3% in early trade Monday, widening its year-to-date gains to 27%. Shares are outperforming a 1.7% gain in the city’s broader Hang Seng Index
    
        HSI,
    
        +1.65%
    
       and helping lift the city’s tech index by 3.0%. Alibaba is a shareholder of Ant.
    

    

    Ant, which owns China’s most widely used digital-payment platform, Alipay, has been overhauling its operations amid a government crackdown that began with Beijing calling off the company’s plans for an IPO in late 2020. The new change of control, announced by Ant over the weekend, moves the company a step closer to restructuring.
    

    Alibaba added Sunday that its equity interest in Ant remains unchanged.
    

    Shares of Alibaba were last up 7.6%. Shares of unit Alibaba Health Information Technology Ltd.
    
        241,
    
        +7.27%
    
       were 8.0% higher.
    

    

    

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    GE HealthCare Is About to Be Independent. This Is Where the Stock Should Trade.
    
			
    GE HealthCare Is About to Be Independent. This Is Where the Stock Should Trade.
    
			
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    To start 2023, investors will have a choice to invest in a brand new $18 billion company with some 50,000 energized employees and a plan to create shareholder value. 
    

    To close out 2022, that company—GE HealthCare—is on the road, introducing itself to investors. With each new detail that emerges investors get a better sense of where the new stock should trade.
    

    

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