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PayPal Holdings Inc. plans to lay off about 7% of its staff as it continues with broader efforts to reduce costs.
Chief Executive Dan Schulman announced the layoffs, which will affect about 2,000 PayPal PYPL employees, in an email to the staff Tuesday afternoon.
“While we have made substantial progress in right-sizing our cost structure,…
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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,
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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U.S. securities regulators on Thursday charged Genesis Global Capital and crypto exchange Gemini Trust Co. with offering and selling of unregistered securities to retail investors, bypassing disclosures and other requirements aimed at protecting market participants.
Genesis and Gemini raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors through unregistered offers, using a crypto asset-lending program called Gemini Earn, the Securities and Exchange Commission said.
The complaint seeks the return of any “ill-gotten gains” plus interest, and any civil penalties, the SEC said.
The SEC is also investigating whether other securities-law violations were committed and whether there are other companies or people relating to the alleged misconduct.
Twins Tyler and Cameron Winklevoss are the founders of Gemini. The crypto exchange was sued late last year by investors alleging that the company sold interest-bearing accounts without registering them as securities, also through the Gemini Earn program.
The Winklevoss twins were early champions of cryptocurrencies, using the money and fame they won in legal wrangling with Facebook parent Meta Platforms Inc.
META,
and Meta’s founder Mark Zuckerberg over their role in creating the social-media giant to launch Gemini.
According to the SEC complaint, the Gemini Earn agreement between Genesis, part of a subsidiary of Digital Currency Group, and Gemini started in December 2020.
Gemini customers, including U.S. retail investors, were to have an opportunity to loan their crypto assets to Genesis in exchange for Genesis’ promise to pay a high interest rate.
Gemini deducted agent fees that were as high as 4.29%, the SEC alleges.
“Genesis then exercised its discretion in how to use investors’ crypto assets to generate revenue and pay interest to Gemini Earn investors,” the SEC said.
By November, however, Genesis announced it would not allow the Gemini Earn investors to withdraw their crypto assets because of a liquidity crunch following volatility in the crypto market after FTX’s bankruptcy filing, the SEC said.
At the time, Genesis held about $900 million in investor assets from 340,000 Gemini Earn investors, the SEC said. Gemini ended the Gemini Earn program earlier this month.
“As of today, the Gemini Earn retail investors have still not been able to withdraw their crypto assets,” the SEC said in a statement.
“We allege that Genesis and Gemini offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors,” SEC Chair Gary Gensler said in a statement.
The charges “build on previous actions to make clear to the marketplace and the investing public that crypto-lending platforms and other intermediaries need to comply with our time-tested securities laws,” Gensler said.
The SEC’s complaint was filed in the U.S. District Court for the Southern District of New York.
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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,
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,
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,
were 8.0% higher.
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This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.
Below is a list of the 20 stocks in the S&P 500
SPX,
that have declined the most in 2022.
First, here’s how the 11 sectors of the benchmark index have performed this year:
| S&P 500 sector | 2022 price change | Forward P/E | Forward P/E as of Dec. 31, 2021 |
| Energy | 57.8% | 9.6 | 11.1 |
| Utilities | -0.5% | 18.8 | 20.4 |
| Consumer Staples | -2.7% | 20.9 | 21.8 |
| Healthcare | -3.2% | 17.4 | 17.2 |
| Industrials | -6.7% | 18.0 | 20.8 |
| Financials | -12.1% | 11.7 | 14.6 |
| Materials | -13.4% | 15.6 | 16.6 |
| Real Estate | -27.7% | 16.2 | 24.2 |
| Information Technology | -28.8% | 19.6 | 28.1 |
| Consumer Discretionary | -37.4% | 20.7 | 33.2 |
| Communication Services | -40.4% | 14.0 | 20.8 |
| S&P 500 | -19.2% | 16.5 | 21.4 |
| Source: FactSet | |||
The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
CL.1,
has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.
Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
TSLA,
and Amazon.com Inc.
AMZN,
which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
META,
along with Match Group Inc.
MTCH,
which is down 69% for 2022, and Netflix Inc.
NFLX,
which is down 52% this year.
There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.
You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
SPX,
traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.
Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.
Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.
| Company | Ticker | 2022 price change | Forward P/E | Forward P/E as of Dec. 32, 2021 |
| Generac Holdings Inc. |
GNRC, |
-71.4% | 13.7 | 30.2 |
| Match Group Inc. |
MTCH, |
-68.9% | 20.1 | 48.5 |
| Align Technology Inc. |
ALGN, |
-67.7% | 27.4 | 48.7 |
| Tesla Inc. |
TSLA, |
-65.4% | 21.7 | 120.3 |
| SVB Financial Group |
SIVB, |
-65.4% | 10.8 | 23.0 |
| Catalent Inc. |
CTLT, |
-64.6% | 13.0 | 32.5 |
| Meta Platforms Inc. Class A |
META, |
-64.2% | 14.7 | 23.5 |
| Signature Bank |
SBNY, |
-64.1% | 6.2 | 18.6 |
| PayPal Holdings Inc. |
PYPL, |
-62.6% | 14.8 | 36.0 |
| V.F. Corp. |
VFC, |
-62.5% | 11.9 | 20.4 |
| Warner Bros. Discovery Inc. Series A |
WBD, |
-59.9% | N/A | 7.5 |
| Carnival Corp. |
CCL, |
-59.8% | 38.1 | N/A |
| Stanley Black & Decker Inc. |
SWK, |
-59.8% | 17.0 | 15.9 |
| Lumen Technologies Inc. |
LUMN, |
-57.8% | 7.7 | 7.8 |
| Zebra Technologies Corp. Class A |
ZBRA, |
-56.7% | 14.5 | 30.1 |
| Dish Network Corp. Class A |
DISH, |
-56.5% | 8.6 | 10.9 |
| Caesars Entertainment Inc. |
CZR, |
-55.7% | 51.4 | 144.5 |
| Lincoln National Corp. |
LNC, |
-55.1% | 3.4 | 6.2 |
| Advanced Micro Devices Inc. |
AMD, |
-55.0% | 17.8 | 43.1 |
| Seagate Technology Holdings PLC |
STX, |
-53.1% | 15.0 | 12.4 |
| Source: FactSet | ||||
Click on the tickers for more information about the companies.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.
Shareholders of these companies have suffered the largest declines in market cap during 2022.
| Company | Ticker | 2022 market capitalization change ($bil) | 2022 price change |
| Apple Inc. |
AAPL, |
-$851 | -27.0% |
| Amazon.com Inc. |
AMZN, |
-$832 | -49.5% |
| Microsoft Corp. |
MSFT, |
-$728 | -28.3% |
| Tesla Inc. |
TSLA, |
-$677 | -65.4% |
| Meta Platforms Inc. Class A |
META, |
-$465 | -64.2% |
| Nvidia Corp. |
NVDA, |
-$376 | -50.3% |
| PayPal Holdings Inc. |
PYPL, |
-$141 | -62.6% |
| Netflix Inc. |
NFLX, |
-$138 | -51.7% |
| Walt Disney Co. |
DIS, |
-$123 | -43.7% |
| Salesforce Inc. |
CRM, |
-$118 | -47.8% |
| Source: FactSet | |||
So there is your surprise for today: Apple is this year’s biggest stock-market loser.
Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices
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It’s been a year of contradictions.
The recession drum beats on, interest rates are rising, and the stock market has taken a tumble, and yet retail sales have risen 6.5% in the last 12 months, trailing a 7.1% increase in the cost of living.
There are other reasons people should consider cutting back on spending in 2023. The personal saving rate — meaning personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — hit 2.4% in the third quarter from 3.4% in the prior quarter, the Bureau of Economic Analysis said.
“There are signs that people are pulling back on certain expenditures. ”
That is the lowest level since the Great Recession and the eighth-lowest quarterly rate on record (since 1947). Adjusted for inflation, savings are down 88% from their 2020 peak and 61% lower than before the pandemic, according to government data. The personal saving rate hit 2.4% in November vs. 2.2% in October.
Are people buying stocks during a bearish market, and/or have they run out of their pandemic-era savings? Whatever the reasons, more judicious investing and spending decisions seem to be the most prudent approach — especially given the uncertain economic outlook for 2023.
There are signs that people are already pulling back on certain expenditures. Although retail sales are up on the year, they did decline 0.6% month-on-month in November to mark their biggest decline in almost a year, largely because of weak car sales.
About those new cars: New-vehicle total sales for 2022 are projected to reach 13,687,000 units, down 8.4% on the year, according to a joint forecast from J.D. Power and LMC Automotive. MarketWatch reporter Philip van Doorn explains all the reasons why you may wish to skip buying a new car in 2023, in addition to their rising prices.
So what else should you save your money on in 2023? MarketWatch writers give their verdict below.
During the pandemic, people loved to buy special purpose acquisitions companies, known as SPACs. In 2021, 613 SPACs listed on U.S. stock exchanges through initial public offerings, according to SPAC Insider. The year before, there were 248 SPAC IPOs. There had never been more than 100 of these before in a single year. There were SPACs associated with Donald Trump and Serena Williams. There were so many, that one was called Just Another Acquisition Corp.
SPACs exist as a means to take private companies public, and theoretically give these shell companies a faster and less regulatory burdensome means to access public capital. The U.S. Securities and Exchange Commission warned investors last April that so-called advantages of the SPAC process, such as reduced legal liability, may not prove to be so solid if tested in court.
The SPACs raised money even though they had no commercial operations or business, and tried to use the cash to buy something that did exist. But investors who bought SPACs that merged with private companies since 2015 have suffered losses of 37%, on average, a year after the merger, according to a recent study. The SPAC and New Issue ETF
SPCX,
has slipped 12% this year. The frenzy for SPACs has predictably gone bust. But if you see one, just stay away from it.
— Nathan Vardi
There are two main reasons not to invest in cryptocurrency in 2023, and neither has to do with the precipitous drop in value for most of the major coins in the last year, including but not limited to bitcoin
BTCUSD,
ethereum
ETHE,
and tether
USDTUSD,
Investors have long been conditioned to buy the dip and find value where others fear to tread, and then make money on the upswing.
Crypto is different because there’s no correlation to long-held market theories, and buying it amounts more to speculation than to investing. That might seem semantic, but if you look at financial planning holistically, then you treat investing as an exercise in risk tolerance — and crypto is all risk.
Which leads to the other main reason to avoid crypto in the next year: If you do buy it, there’s really no safe way to store it. There’s no federal insurance covering exchange failures and little cyber-theft protection for individuals. That leaves you on your own, which is not a good place to be with your money.
— Beth Pinsker
On the consumer front, if you’re really into virtual reality, there is nothing wrong with jumping on the new Meta Quest two and Meta Quest Pro headsets that were introduced in 2022 by Meta Platforms Inc.
META,
The problem is that you might feel like you bought a BlackBerry
BB,
phone in early 2007. Apple Inc.
AAPL,
is expected to finally show off what engineers at the Silicon Valley giant have been cooking up in a years-long project to jump into augmented and virtual reality, and consumers are expected to at least get a glimpse at Apple’s attempt this year, if not a chance to buy whatever the company produces.
The headsets don’t come cheap: Meta said earlier this year it was raising the price of Meta Quest 2 headsets by $100 to $399.99 (128GB) and $499.99 (256GB). The iPhone’s introduction 15 years ago changed the way people look at smartphones, and Apple’s expected jump into this field in 2023 could leave anyone who spent their money on a Meta Quest headset wishing for a new reality.
— Jeremy Owens
Struggling companies with business models that appear to some to be dying and/or struggling do not generally perform well in the stock market. But during the pandemic these companies often had stocks that soared. What drove them was social media sentiment, driven on platforms like Reddit, by a swarm of retail investors.
There was video game retailer GameStop
GME,
movie theater chain AMC
AMC,
and smartphone dinosaur Blackberry. AMC recently announced the sale of another $110 million in stock, adding to a total that has already exceeded $2 billion since the theater chain got swept up into meme-stock madness. CEO Adam Aron wrote on Twitter that the move put the company “in a much stronger cash position.”
GameStop recently reported its seventh consecutive quarterly loss and reiterated its goal of returning to profitability in the near term, but analysts have signaled that many challenges lie ahead. During the company’s recent third-quarter conference call, Chief Executive Officer Matt Furlong said that GameStop would be open to exploring acquisitions of a strategic asset or complimentary business if they were available “in the right price range.”
Buying meme companies like this worked for some in a booming stock market fueled by ultra-low interest rates. But we are now in a bear market with interest rates that are elevated. Corporate fundamentals are back in vogue. So are quaint investment ideas like cashflow. More likely than not, the days of buying meme stocks are over.
— Nathan Vardi
In recent years, Tesla Inc.
TSLA,
has stood alone as the best option for electric vehicles, while other manufacturers struggled to get production running. But in 2023, there should be many more types of electric cars available, at prices that are expected to trend downward as the year goes along. Teslas range in price from $46,990 for the Tesla Model 3 to $138,880 for the Tesla Model X Plaid.
With major manufacturers such as General Motors Co.
GM,
Ford Motor Co.
FORD,
Toyota Corp. and Volkswagen
VOW,
VLKAF,
jumping into the fray, and young Tesla wannabes like Rivian Automotive Inc.
RIVN,
Lucid Group Inc.
LCID,
and FIsker Inc.
FSR,
expected to start producing cars, consumers will have many more options for EVs.
Meanwhile, Tesla has done little to update the Model 3 since it was introduced in 2017, and has increased prices at a level that Chief Executive Elon Musk has admitted is “embarrassing” for a company that claimed to have a goal of mass-market pricing for EVs.
The average price of a new EV is $64,249, while a new gas car is $48,281, according to Liz Najman, a climate scientist and communications and research manager at Recurrent Auto, an EV research and analytics firm focused on the used-vehicle market. After years of not having much choice beyond Tesla for EVs, 2023 appears to be the year that changes.
— Jeremy Owens
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Restaurants are set to become the biggest winners of a holiday season that could turn out to be the most normalized since the onset of the pandemic.
That’s according to a new Mastercard SpendingPulse survey released on Monday, which showed spending at dining establishments surging 15.1% over the 2021 holiday period. Total retail expenditures for the Nov. 1–to–Dec. 24 period in 2022 rose 7.6%, with in-store spending up 6.8% and online spending up 10.6%.
Restaurant spending beat out several other categories, such as apparel, where spending was up 4.4% from 2021, and electronics and jewelry, where a respective 5.3% and 5.4% less were spent, and department stores, which saw spending rise 1%.
“This holiday retail season looked different than years past,” said Steve Sadove, senior adviser for Mastercard and former CEO and chairman of Saks Inc. “Retailers discounted heavily but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings postpandemic.”
Government data for November showed consumer spending was up just 0.1%, reflecting cautiousness among households and price cutting by retailers to lure those hesitant shoppers in. But the data also showed more spending on holiday recreation and travel, expected to go in the books as a busy season even if deadly winter storm may have wreaked havoc on the plans of many Americans over the Christmas weekend.
Of course, even as some merrymakers felt confident enough to make more plans and see more friends and family this year, the virus of course continues to cause illness and death. The U.S. reported 70,000 newly diagnosed cases for the first time since September on Thursday, while 422 people died of COVID-19 on Wednesday.
Don’t miss: As COVID cases rise, how to steer clear of viruses during the holiday season
Also see: 4 tips for staying healthy while traveling during this ‘tripledemic’ cold and flu season
The Mastercard SpendingPulse data measure in-store and online retail sales for all payment forms and are not inflation-adjusted.
As for the companies that might be benefiting from that increased traffic, the year-end cheer probably won’t be enough to make a dent in what has been a difficult year with would-be consumers juggling worries over inflation, rising interest rates and a war in Europe.
The Invesco Dynamic Leisure & Entertainment exchange-traded fund
PEJ,
whose holdings include Chipotle Mexican Grill
CMG,
McDonald’s
MCD,
and First Watch Restaurant Group
FWRG,
has gained 6.5% to date in the fourth quarter and is down 20% for the year as of Thursday. The broad benchmark S&P 500
SPX,
is poised for a nearly 20% loss in 2022.
Read: How a Santa Claus rally, or lack thereof, sets the stage for the stock market in first quarter
And: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices
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Elon Musk has been trying this week to defend Tesla’s abysmal stock performance in 2022. The electric vehicle giant has seen its stock plummet by 61% this year, making it the 11th-worst performing stock in the S&P 500 in 2022.
“As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are *not* guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop,” Musk tweeted.
You might expect that Tesla’s stock drop has wiped out more investor wealth than any other stock in the world this year. But you would be wrong.
If we look at declines in market capitalization — the value of companies’ common-shares outstanding — Tesla
TSLA,
has been the fourth worst-performing stock in the benchmark S&P 500 this year, as of 1 p.m. ET on Dec. 21:
| Company | Ticker | 2022 market cap change ($bil) | Intraday market cap on Dec. 21 ($bil) | Dec. 31, 2021 market cap ($bil) | 2022 price change |
| Amazon.com Inc. |
AMZN, |
-$805 | $886 | $1,691 | -48% |
| Apple Inc. |
AAPL, |
-$753 | $2,160 | $2,913 | -24% |
| Microsoft Corp. |
MSFT, |
-$700 | $1,825 | $2,525 | -27% |
| Tesla Inc. |
TSLA, |
-$622 | $439 | $1,061 | -61% |
| Meta Platforms Inc. Class A |
META, |
-$466 | $318 | $784 | -64% |
| Nvidia Corp. |
NVDA, |
-$329 | $406 | $735 | -44% |
| PayPal Holdings Inc. |
PYPL, |
-$143 | $79 | $222 | -63% |
| Netflix Inc. |
NFLX, |
-$134 | $133 | $267 | -51% |
| Walt Disney Co. |
DIS, |
-$122 | $160 | $282 | -44% |
| Salesforce Inc. |
CRM, |
-$119 | $131 | $250 | -49% |
| Source: FactSet | |||||
On a percentage basis, all these stocks have performed worse than the full S&P 500, which has fallen 19%, excluding dividends.
Amazon.com Inc.
AMZN,
has erased more shareholder wealth than any other publicly traded company in 2022. In total, investors in Amazon have lost $804.6 billion this year. The stock is down 48% in 2022.
Apple Inc.
AAPL,
and Microsoft Corp.
MSFT,
have also suffered larger market-cap declines than Tesla, by virtue of their sheer size.
The companies have different fiscal and annual period ends, but if we look at data for the past three reported quarters and compare to the same period a year earlier, here’s how the four stack up:
| Company | Ticker | Change in sales for three quarters from year-earlier period | Change in EPS for three quarters from year-earlier period |
| Amazon.com Inc. |
AMZN, |
10% | N/A |
| Apple Inc. |
AAPL, |
6% | 2% |
| Microsoft Corp. |
MSFT, |
14% | -2% |
| Tesla Inc. |
TSLA, |
58% | 169% |
| Source: FactSet | |||
Amazon showed a net loss of $3 billion for the first three quarters of 2022 as the company neared the end of its extraordinary multiyear effort to build out its warehouse and fulfillment infrastructure. For the first three quarters of 2021, the company booked $19 billion in profits. When announcing Amazon’s third-quarter results CEO Andy Jassy said the company was working methodically toward “a stronger cost structure for the business moving forward.”
The incredible growth of Amazon’s cloud business has stalled and disappointed the expectations the company had nurtured on Wall Street. The Amazon Web Services business is facing increasing competition from the likes of Microsoft and its customers are pulling back. Meanwhile, retail sales have also come in weak going into the Christmas and holiday season.
Amazon’s stock has declined 22% since it closed at $110.96 on Oct. 27, right before it disappointed investors not only with its third-quarter results, but with its outlook: It expects to break even during the holiday quarter. Analysts polled by FactSet had previously expected a profit of more than $5 billion.
Tesla stands in contrast to Amazon, as you can see on the table above. Its sales grew by 58% during the first three quarters of 2022 from the year-earlier period and its earnings per share rose nearly threefold.
This has been a year of significant declines for shares of giant tech-oriented companies, especially those that had traded at lofty price-to-earnings valuations — that group includes Amazon and Tesla. In fact, these companies have given up all their pandemic era gains int he stock market.
But with Tesla’s results so outstanding through the first three quarters of 2022, it raises the question: How much of the drop in the electric car makers share price was tied to Musk’s actions as CEO of Twitter, which he acquired on Oct. 27 after a monthslong saga? And how much of a relief rally, if any, might there be for Tesla if Musk, as expected, steps down as Twitter CEO?
Here’s the same list of 10 stocks in the S&P 500 that have seen the largest declines in market cap this year, with a summary of analysts’ ratings, consensus price targets and declines in their forward price-to-earnings ratios:
| Company | Ticker | Share “buy” ratings | Dec. 21 closing price | Cons. price target | Implied 12-month upside potential | Forward P/E as of Dec. 20 | Forward P/E as of Dec. 31, 2021 |
| Amazon.com Inc. |
AMZN, |
91% | $85.19 | $134.85 | 58% | 49.3 | 64.9 |
| Apple Inc. |
AAPL, |
74% | $132.30 | $173.44 | 31% | 21.4 | 30.2 |
| Microsoft Corp. |
MSFT, |
91% | $241.80 | $293.06 | 21% | 23.7 | 34.0 |
| Tesla Inc. |
TSLA, |
63% | $137.80 | $272.64 | 98% | 24.6 | 120.3 |
| Meta Platforms Inc. Class A |
META, |
63% | $117.09 | $145.45 | 24% | 14.5 | 23.5 |
| Nvidia Corp. |
NVDA, |
68% | $160.85 | $195.72 | 22% | 39.2 | 58.0 |
| PayPal Holdings Inc. |
PYPL, |
71% | $68.76 | $104.32 | 52% | 14.5 | 36.0 |
| Netflix Inc. |
NFLX, |
47% | $288.19 | $302.89 | 5% | 28.4 | 45.6 |
| Walt Disney Co. |
DIS, |
82% | $87.02 | $119.60 | 37% | 19.8 | 34.2 |
| Salesforce Inc. |
CRM, |
78% | $128.45 | $195.18 | 52% | 23.4 | 53.5 |
| Source: FactSet | |||||||
A majority of analysts see a golden path ahead for 2023 for all of these stocks except for Netflix.
For more information about any of these companies, click the tickers.
Click here for a detailed guide to the wealth of information available for free on the MarketWatch quote page.
Don’t miss: 11 high-yield dividend stocks that are Wall Street’s favorites for 2023
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Caroline Ellison has apologized for stealing billions in customer deposits at crypto exchange platform FTX to make bets at Alameda Research, the hedge fund she ran.
“‘I am truly sorry for what I did.’”
Ellison made her comments in front of a judge in New York federal court, as she pleaded guilty to helping Sam Bankman-Fried make away with billions in customer funds while misleading investors and lenders and playing down the risk of their crypto trading platform.
“‘I knew that it was wrong.’”
Along with Ellison, Zixiao “Gary” Wang, a former FTX chief technology office and co-founder, 29, pleaded guilty Monday this week during separate hearings.
Federal authorities and regulators are making the case that Wang wrote software code, at Bankman-Fried’s behest, to create backdoors into FTX’s systems that allowed Ellison’s Alameda access to customer money and prop up FTX’s own token, FTT.
The pair each potentially face decades in prison sentences if convicted after pleading guilty to charges that included wire fraud, securities and commodities fraud in exchange for leniency.
Both have agreed to cooperate with authorities to lay the groundwork for Bankman-Fried’s own case as the alleged brains behind of one of the biggest crypto frauds in recent memory.
On Thursday, Bankman-Fried was released from custody on a $250 million bond, following his first appearance in a U.S., court on fraud charges.
FTX filed for bankruptcy on Nov. 11 when Bankman-Fried was ousted from the company he co-founded in 2019.
The collapse of FTX was, perhaps, hastened by its competitor, Binance, who announced it was unloading $500 million in FTT tokens in November due to “recent revelations that have come to light” about the company’s books. That triggered mass redemptions by depositors, which FTX couldn’t meet.
Ellison is a Stanford University graduate who grew up in the suburbs of Boston, the daughter of two MIT economists, according to the Wall Street Journal. After graduation, she worked at quantitative trading firm Jane Street, where she met fellow trader Bankman-Fried. She was rumored to be in a relationship with Bankman-Fried, who is an MIT grad, according to reports.
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London
CNN
—
Fashion’s ephemeral nature might seem an odd bedfellow for the blockchain, an online ledger that’s designed to be permanent. But the industry is finding ways to harness it and other digital tools to reduce waste and push fashion into the future.
Italian company Lablaco is working with fashion houses and brands to digitize their collections in the burgeoning “phygital” fashion market — when customers buy both a physical fashion item and its digital “twin,” designed to be collected or worn by avatars in virtual environments like the metaverse.
Lablaco was founded in 2016 by Lorenzo Albrighi and Eliana Kuo. Both had backgrounds in luxury fashion, but were looking to improve the industry’s sustainability credentials and promote circular fashion — the practice of designing and producing clothes in a way that reduces waste.
The pair launched the Circular Fashion Summit in 2019 and Lablaco worked with retailer H&M to introduce a blockchain-based clothes rental service in 2021.
Pushing fashion into digital spaces helps generate data that is vital in efforts to move toward circular fashion, they argue. With Lablaco’s model, physical and digital items remain paired even after sale, so if a physical item is resold, the digital equivalent is transferred to the new owner’s digital wallet. The transparency of blockchain technology means the new owner can be assured of its authenticity and the item’s creator can follow its aftersales journey.
“If you don’t digitize the product itself, you cannot have any data to measure, and you don’t know what’s the impact of the fashion,” Albrighi tells CNN Business.
The textile and fashion industry creates roughly 92 million tons of waste annually, and digital fashion could have a role in reducing that figure.
Kuo says digital spaces could be used as a testbed for the physical world. For example, a designer could release an item of digital clothing in 10 colors in the metaverse, and use the sales data to inform which colors to use for the real-world version. “It becomes automatically an on-demand model, which really can reduce the fashion waste,” she says.
Trying on virtual clothes could also reduce the amount of clothes that are returned in the physical world, says Albrighi. He adds that staging fashion shows in virtual spaces reduces the need for the fashion world to travel. Both interventions have the potential to reduce the industry’s carbon footprint.
But for these innovations to become widespread, Albrighi says incentivizing designers is key. With the phygital model, the transparency of the blockchain could allow brands to receive royalties when an item is resold throughout its lifetime — a way to “produce less and actually earn more.”
“It’s the beginning of a brand new industry,” he says.
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On the same day that that the Bahamas extradited FTX co-founder and former CEO Sam Bankman-Fried to the U.S. to face criminal charges, two former executives at FTX and Alameda Research pleaded guilty Wednesday to federal fraud charges.
Caroline Ellison, 28, the former chief executive of Alameda Research — the crypto trading company founded by Bankman-Fried — and Zixiao (Gary) Wang, 29, co-founder of crypto platform FTX and its former chief technology officer, were charged for their roles in contributing to the crypto platform’s collapse.
The pair each faced decades-long prison sentences if convicted, and pleaded guilty to charges that included wire fraud, securities fraud and commodities fraud in exchange for leniency. In a video Wednesday night, U.S. Attorney Damian Williams of the Southern District of New York said both were cooperating in the continuing investigation into FTX and Bankman-Fried.
Williams added that Bankman-Fried, 30, was in FBI custody and will appear in court in “as soon as possible,” and suggested more charges in the FTX case could be forthcoming.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams said. “We are moving quickly and our patience is not eternal. … and we are far from done.”
In a parallel action, the Securities and Exchange Commission on Wednesday also charged Ellison and Wang “for their roles in a multiyear scheme to defraud equity investors in FTX.”
According to the SEC complaint, Ellison helped manipulate the price of FTX-issued crypto token FTT, which served as collateral for undisclosed loans from FTX customers’ assets to Alameda. In addition, the SEC alleges Bankman-Fried misled customers by falsely claiming FTX was a safe trading platform with strict risk-mitigation measures.
The SEC claims Wang created software code to allow Alameda to divert FTX customers’ funds, and that Ellison used those funds for Alameda’s trading activity.
“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” SEC Chair Gary Gensler said in a statement. “We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”
Bankman-Fried was arrested in the Bahamas last week after he was indicted by U.S. federal prosecutors, who allege he played a key role in the collapse of FTX, diverting billions of dollars of customer assets and defrauding investors, customers and lenders.
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NASSAU, Bahamas — Bahamian authorities said Wednesday that former FTX CEO Sam Bankman-Fried has been extradited to the United States, where he faces criminal charges related to the collapse of the cryptocurrency exchange.
Bahamas’s attorney general’s office said that Bankman-Fried would be leaving for the United States later Wednesday, noting he had waived his right to challenge the extradition.
Reporters on the scene witnessed Bankman-Fried leaving a Magistrate Court in Nassau in a dark SUV earlier Wednesday. The vehicle was later seen arriving at a private airfield by Nassau’s airport, from which he is expected to be flown to the United States. He is due to land in New York and will likely appear in front of a U.S. judge on Thursday.
“The Bahamas has determined that the provisional arrest, and subsequent written consent by (Bankman-Fried) to be extradited without formal extradition proceedings satisfies the requirements of the (extradition treaty between the U.S. and the Bahamas) and our nation’s Extradition Act,” said Bahamian Attorney General Ryan Pinder, in a statement.
Bahamian authorities arrested Bankman-Fried last week at the request of the U.S. government. U.S. prosecutors allege he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family.
The 30-year-old could potentially spend the rest of his life in jail.
Bankman-Fried was denied bail Friday after a Bahamian judge ruled that he posed a flight risk. The founder and former CEO of FTX, once worth tens of billions of dollars on paper, had been held in the Bahamas’ Fox Hill prison, which has been has been cited by human rights activists as having poor sanitation and as being infested with rats and insects.
Once he’s back in the U.S., Bankman-Fried’s attorney will be able to request that he be released on bail.
Bankman-Fried was one of the world’s wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world.
He has said that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.
At a congressional hearing last week, the new FTX CEO John Ray III, who is tasked with taking the company through bankruptcy, bluntly disputed those assertions: “We will never get all these assets back,” Ray said.
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Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, which faced a colossal collapse this year, was arrested in the Bahamas on Monday, and is facing criminal charges in the United States, according to a Bahamian official.
The Attorney General of the Bahamas, through spokesman Latrae Rahming, posted a statement on Twitter detailing the arrest. Bankman-Fried, commonly known as SBF, lives in the Bahamas, where the cryptocurrency exchange was also based.
“SBF’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” the statement reads.
The U.S. Attorney for the Southern District of New York later tweeted that his office had filed a sealed indictment, which led to the arrest.
“We expect to move to unseal the indictment in the morning and will have more to say at that time,” Damian Williams said in a tweet from the office’s official Twitter account.
The Securities and Exchange Commission and the Justice Department are investigating the company, and the New York Times reported last week that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of cryptocurrencies TerraUSD and Luna to benefit FTX and his Alameda hedge fund. The former chief executive of FTX was expected to testify remotely in front of a House Financial Services Committee panel on Tuesday.
FTX, one of the largest cryptocurrency exchanges in the world, filed for bankruptcy protection in November, and Bankman-Fried resigned as CEO. The new CEO of FTX, John J. Ray III, is expected to testify in front of members of Congress on Tuesday, and in prepared remarks released Monday, he said that Bankman-Fried’s management of FTX was an “utter failure” that lacked any level of financial control.
MarketWatch staff writer Robert Schroeder contributed to this article.
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FTX founder Sam Bankman-Fried is being investigated by federal prosecutors over whether he manipulated prices of two cryptocurrencies to benefit his companies, according to a new report, and has also been ordered to testify before a Senate committee about the collapse of his crypto platform.
The New York Times reported Wednesday night that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of TerraUSD and Luna to benefit FTX and his Alameda hedge fund. Terra and Luna saw more than $50 billion in market value wiped out when they collapsed in May. That contributed to a wider crypto crash, and eventually the implosion of FTX.
The Times reported the probe is in its early stages, and is part of a wider investigation into FTX’s collapse and the potential misappropriation of billions of dollars of customers’ funds, which are now missing. Additionally, the Times confirmed a November Bloomberg report that FTX was also being investigated for potentially violating U.S. money-laundering laws months before FTX’s collapse.
FTX, once one of the world’s largest cryptocurrency exchanges, collapsed and filed for Chapter 11 bankruptcy protection in November after running into liquidity issues. Bankman-Fried resigned as CEO, and saw his personal fortune of about $23 billion all but evaporate. About $8 billion remains missing from FTX’s balance sheet; Bankman-Fried said in a Bloomberg interview the funds were “misaccounted,”
Separately, the Senate Banking Committee late Wednesday ordered Bankman-Fried to testify about the collapse of FTX on Dec. 14, and said it is prepared to issue a subpoena if he does not voluntarily agree to comply by the end of the day Thursday.
“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement.
“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators said in a letter to Bankman-Fried.
On Tuesday, Binance Chief Executive Changpeng Zhao called Bankman-Fried a “master manipulator” and “one of the greatest fraudsters in history.”
Read more: Coinbase CEO Brian Armstrong says it’s ‘baffling’ that Sam Bankman-Fried isn’t in custody
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Sam Bankman-Fried opened up his wallet to Washington in a big way during the 2022 election cycle, donating about $40 million publicly.
So which politicians got money from the founder and former CEO of collapsed cryptocurrency exchange FTX?
MarketWatch has compiled an interactive list below of the candidates and committees who received funds from Bankman-Fried based on the latest disclosures to the Federal Election Commission.
Overall, he gave almost all of the $40 million to Democratic politicians or groups, and just over $200,000 to Republicans, according to the disclosures.
In a wide-ranging interview at the New York Times Dealbook Summit last week, Bankman-Fried said donations were made to candidates who voiced support for pandemic prevention.
At least two Democratic senators received over $20,000 each from Bankman-Fried through joint political action committees tied to their candidacies. Those are Michigan’s Debbie Stabenow and New Hampshire’s Maggie Hassan. New York Democratic Sen. Kirsten Gillibrand got at least $10,000. Gillibrand is the co-sponsor of a crypto bill that would have the Commodity Futures Trading Commission oversee bitcoin, ether and most other digital assets and give a secondary regulatory role to the Securities and Exchange Commission.
In the wake of FTX’s collapse, politicians have been saying they will donate or have donated the money that they received from SBF to charities or other groups, or they’re giving it back.
Gillibrand spokesman Evan Lukaske said the senator donated her funds to Ariva Inc., a Bronx-based nonprofit that offers free financial counseling. Stabenow, whose own bill empowering the CFTC to regulate crypto was backed by Bankman-Fried, plans to donate the contributions to a local charity. A representative for Sen. Hassan did not respond to requests for comment.
Related: ‘Bedazzled by money’: Democratic ties to Sam Bankman-Fried under scrutiny after FTX collapse
While 50 Democratic House and Senate candidates received donations, only eight Republican Senate candidates received money from the former CEO.
SBF — known for being a Democratic megadonor — has claimed he made contributions that don’t show up in FEC disclosures. He told video blogger Tiffany Fong that he donated as much to Republicans as he did to Democrats, but the GOP donations were “dark-money” contributions, making his claim difficult to verify. Such secret contributions, allowed by the Supreme Court’s 2010 Citizens United ruling, wouldn’t show up in the FEC disclosures used to compile MarketWatch’s list.
Another FTX exec, Ryan Salame, became known as a Republican megadonor earlier this year, with a MarketWatch analysis in October finding that he publicly gave about $17 million to GOP groups.
Use our interactive below to search through donations as reported to the FEC.
Donations also filtered into committees associated with Bankman-Fried himself — Guarding Against Pandemics and GMI PAC.
MarketWatch’s Victor Reklaitis contributed to this story.
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Hedge-fund titan Bill Ackman appears to be walking back comments he made via Twitter last week about Sam Bankman-Fried that some interpreted as implicit support for the 30-something who presided over one of the most epic bankruptcies in financial markets in recent memory.
Last week, Ackman tweeted that Bankman-Fried’s statements made during a widely watched interview, streamed to New York from the crypto founder’s location in the Bahamas, was “believable.”
“Many have interpreted my tweet to mean that I am defending SBF or somehow supporting him. Nothing could be further from the truth,” Ackman wrote Saturday, referring to Bankman-Fried by his initials SBF.
Ackman went on to describe the implosion of Bankman-Fried’s crypto exchange FTX, and some of its associated businesses, as “at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career.”
Check out: The Sam Bankman-Fried roadshow rolls on: 10 crazy things the FTX founder has just said
Ackman, who is the chief executive of Pershing Square Capital, a prominent investor in traditional markets, and an advocate of crypto, last week, tweeted this message following the widely watched interview of Bankman-Fried at the New York Times Dealbook Summit:
“Call me crazy, but I think SBF is telling the truth.”
Ackman has been chastised by some for seemingly offering verbal succor to a person who some have accused of, at the least, an epic mismanagement of client assets.
Speaking against the wishes of his lawyers, Bankman-Fried on Wednesday, during the Dealbook interview, admitted to making mistakes but said that he never intended to mingle client funds with those of the firm to make leveraged bets on crypto via hedge fund Alameda Research, which he founded before he started FTX.
“I didn’t know exactly what was going on,” Bankman said at the time.
At least one response to Ackman’s Saturday tweet, questioned whether the hedge funder might be responding to blowback from his own clients.
It isn’t the first time that Ackman has cast Bankman-Fried’s actions in a positive light. As the implosion of FTX was unfolding, Ackman said, in a now-deleted tweet, that he’d never before seen a CEO take responsibility as the crypto exchange operator did and that he wanted to give him “credit” for his actions. “It reflects well on him and the possibility of a more favorable outcome” for FTX, he wrote.
On Saturday, one Twitter user asked Ackman if had any ties to Bankman-Fried, which the investor bluntly said he doesn’t.
Bankman-Fried had been viewed as a financial darling inside and outside the crypto industry until his empire collapsed on Nov. 11 and it was revealed that affiliated hedge fund Alameda lost billions in FTX client money in leveraged crypto bets.
John Ray, the new chief executive of FTX, in a filing to the U.S. Bankruptcy Court for the District of Delaware, described the state of the crypto platform “as a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
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SAN SALVADOR, El Salvador — El Salvador’s government announced Tuesday that it will make a second buyback of its sovereign debt bonds maturing in 2023 and 2025 as it tries to calm market concerns that it could default on its debt.
The government set the maximum for the repurchase at $74 million. The 2023 and 2025 bond offerings were $800 million each.
In September, the government bought back $565 million of those bonds.
President Nayib Bukele said via Twitter that the September repurchase “was so successful that we have decided to launch ANOTHER OFFER for the remainder of the 2023 and 2025 bonds.”
The debt was issued by previous administrations in 1999 and 2004.
El Salvador last year became the first country to make the cryptocurrency bitcoin legal tender, drawing criticism from international lenders. The International Monetary Fund asked the government to reverse that decision, but Bukele dismissed the request and said the country would issue bonds denominated in bitcoin, something that has still not happened a year later.
Bukele’s government has also invested heavily in bitcoin, which has since plummeted in value.
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