Tag: industrial news

U.S. Supreme Court preserves near-term access to abortion pill mifepristone

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WASHINGTON (AP) — The Supreme Court on Friday preserved women’s access to a drug used in the most common method of abortion, rejecting lower-court restrictions while a lawsuit continues.

The justices granted emergency requests from the Biden administration and New York–based Danco Laboratories, maker of the drug, called mifepristone. They are appealing a lower-court ruling that would roll back Food and Drug Administration approval of mifepristone.

The drug has been approved for use in the U.S. since 2000 and more than 5 million people have used it. Mifepristone is used in combination with a second drug, misoprostol, in more than half of all abortions in the U.S.

The court faced a self-imposed Friday night deadline to decide whether women’s access to a widely used abortion pill would remain unchanged or be restricted while a legal challenge to its Food and Drug Administration approval goes on.

The justices have been weighing arguments that allowing restrictions contained in lower-court rulings to take effect would severely disrupt the availability of the drug, mifepristone, which is used in the most common abortion method in the United States.

It has repeatedly been found to be safe and effective, and has been used by more than 5 million women in the U.S. since the FDA approved it in 2000.

The Supreme Court had initially said it would decide by Wednesday whether the restrictions could take effect while the case continues. A one-sentence order signed by Justice Samuel Alito on Wednesday gave the justices two additional days, without explanation.

Abortion opponents filed suit in Texas in November, asserting that FDA’s original approval of mifepristone 23 years ago and subsequent changes were flawed.

Matthew Kacsmaryk, shown listening to a question during his confirmation hearing before the Senate Judiciary Committee in 2017, is the lone federal judge in his north Texas district — a fact that led to speculation among critics that the abortion-pill case had landed in his courtroom via judge shopping.

Senate Judiciary Committee/AP

Further context (March 2023): Trump appointee in single-judge federal district in Texas could bar nationwide access to the abortifacient mifepristone

Also (April 2023): Access to abortion pill in limbo after competing rulings in Texas and Washington

They won a ruling on April 7 by U.S. District Judge Matthew Kacsmaryk, an appointee of former President Donald Trump, revoking FDA approval of mifepristone. The judge, the lone judge in his Amarillo, Texas, federal district, gave the Biden administration and Danco a week to appeal and seek to keep his ruling on hold.

Responding to a quick appeal, two more Trump appointees on the 5th U.S. Circuit Court of Appeals said the FDA’s original approval would stand for now. But Judges Andrew Oldham and Kurt Englehardt said most of the rest of Kacsmaryk’s ruling could take effect while the case winds through federal courts.

MarketWatch contributed.

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April 21, 2023
Son of WWE ‘Million Dollar Man’ Ted DiBiase charged in scam involving NFL legend Brett Favre

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Federal prosecutors have leveled a legal dropkick on former pro wrestler Ted DiBiase Jr., charging him with stealing millions of dollars meant to feed needy kids in a Mississippi scandal that has also tarnished the reputation of NFL hall of famer Brett Favre.

From the archives (September 2022): NFL star Brett Favre and Gov. Phil Bryant texted about how to use $5 million of welfare funds to build a new volleyball stadium

DiBiase,…

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April 21, 2023
European stocks break two-day declining streak

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European stocks finished higher Friday, with the Stoxx Europe 600 index STOXX Europe 600 Index rising 0.34% to 469.00.

The German DAX DAX increased 0.54% to 15,881.66, the French CAC 40 index CAC 40 Index increased 0.51% to 7,577.00 and the FTSE 100 index FTSE 100 Index increased 0.15% to 7,914.13.

Among Stoxx Europe 600 constituents, health…

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April 21, 2023
Don’t worry too much about losing your bank cash. Bank-failure data don’t support panic over uninsured deposits.

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As Silicon Valley Bank was wobbling last month, large account holders with balances exceeding the federal deposit insurance limits panicked, sparked a bank run that ultimately prompted the federal government to step in with a rescue plan, and triggered widespread debate about potential reforms to the federal deposit insurance system.

All that drama, however, was at odds with federal data showing that bank failures stretching back to the start of the 2007-2009 global financial crisis have in aggregate done very little harm…

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April 21, 2023
SAP Cloud Sales Miss and Software Giant Cuts Outlook. Why the Stock Is Rising.

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SAP

missed expectations for sales in its key cloud division and cut its outlook in first-quarter earnings released Friday. But the stock is still rising after the German software giant beat estimates for overall profit and revenue.

SAP

(ticker: SAP) reported earnings of €1.27 ($1.39) a share on revenue of €7.44 billion in the first three months of 2023. Analysts surveyed by FactSet had expected profit of €1.10 on sales of €7.30 billion.

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April 21, 2023
BuzzFeed stock plunges over 20% as media company shuts down BuzzFeed News, cuts jobs

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BuzzFeed Inc. said Thursday it is shutting down BuzzFeed News and laying off about 15% of its workforce as founder and Chief Executive Jonah Peretti said it has faced “more challenges than I can count.”

BuzzFeed stock
BZFD,
-19.71%
initially fell as much as 25% after the news. HuffPost and BuzzFeed.com will open “a number of select roles for members of BuzzFeed News,” Peretti said in a memo to staff. HuffPost, which is profitable and enjoys a “loyal direct front page audience,” will be BuzzFeed’s single news brand.

“We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts,” Peretti said in the memo.

“Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.”

The CEO also said he and executives could have “managed these changes better.” The integration of BuzzFeed and Complex, which BuzzFeed bought in 2021 for $300 million, “should have been executed faster and better.”

BuzzFeed went public in December 2021 through a merger with a special-purpose acquisition company, or SPAC. The deal valued BuzzFeed at $1.5 billion.

The acquisition of Complex, then a joint venture between Hearst and Verizon Communications Inc. that catered to millennials and Gen Zers, was a bid to open up other revenue streams and rely less on advertising.

BuzzFeed Inc. bought HuffPost from an unit of Verizon in November 2020.

Peretti said he decided to “overinvest” in BuzzFeed News “because I love their work and mission so much,” which made him slow “to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”

Chief Revenue Officer Edgar Hernandez and Chief Operating Officer Christian Baesler are leaving as well. The focus going forward is on reducing layers in the organization, streamlining the product mix, “doubling down” on social-media creators, and bringing AI to the sales process, Peretti said in the memo.

BuzzFeed has about 1,200 employees as of December. It had 1,368 employees across seven countries that month, and announced layoffs hitting about 12% of its workforce.

Also Thursday, Insider, the news site formerly known as Business Insider, said it was cutting 10% of its workforce due to “economic headwinds.”

BuzzFeed shares have lost 85% in the past 12 months, compared with losses of around 7% for the S&P 500 index.
SPX,
-0.60%

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April 20, 2023
Worried the IRS is going to audit your tax return? If you earn less than $400,000, you can probably relax.

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Some clarity is emerging regarding statements from Biden administration officials that no one making less than $400,000 will see higher audit rates by the Internal Revenue Service, which is about to step up its scrutiny of wealthy taxpayers.

The Inflation Reduction Act — the tax and climate package enacted last summer — earmarked $80 billion for the IRS over the next decade and a half. The money is intended in part to facilitate more audits of corporations and wealthier individuals.

Ahead of the bill’s passage, Treasury Secretary Janet Yellen pledged that there would be no increase in the audit rate for households and small businesses with annual incomes below $400,000 “relative to historical levels.”

But Republican critics and other observers have asked what “historical levels” might actually mean.

The audit rate on returns for tax year 2018 is the reference point to keep in mind, IRS Commissioner Danny Werfel told senators on Wednesday. He emphasized that “there’s no surge coming for workers, retirees and others.”

The IRS audited fewer than 1% of 2018 returns with total positive incomes — the sum of all positive amounts shown for various sources of income reported on an individual income-tax return, which excludes losses — of between $1 and $500,000, according to statistics that the tax agency released last week.

The agency has three years to start an audit from the time it receives a return.

Also read: The IRS wants more people working in tax enforcement. Now it has to find them.

The numbers show that 0.4% of returns for taxpayers earning up to $25,000 were audited. That figure was 0.3% for returns between $200,000 and $500,000 and more than 9% for returns over $10 million, the IRS data show. Six years earlier, more than 13% of returns over $10 million were scrutinized, according to the IRS.

“Help us with understanding what the words ‘historic level’ means,” Sen. James Lankford, a Republican from Oklahoma, asked Werfel during a Wednesday budget hearing.

“We will take the most recent final audit rate, and it’s historically low … and we allow that to be the marker for least several years, and then we’re revisit it,” Werfel said. The 2018 audit rates were the newest final rates, he added.

“So the 2018 number is what it’s going to be?” Lankford asked.

“Yes,” Werfel replied.

“Werfel’s explanation that 2018 audit levels will be the reference point is the most detail I’ve heard so far,” Erica York, s senior economist at the Tax Foundation, told MarketWatch. “He did seem to leave open the possibility of revisiting the reference year for ‘historical’ in the future,” she added.

Another open question has been how the $400,000 income threshold will be determined. Months after the Inflation Reduction Act passed, IRS and Treasury officials still hadn’t finalized what counted as $400,000 in income, according to a January Treasury Department watchdog report.

“How are you arriving at this number?” asked Sen. Marsha Blackburn, a Republican from Tennessee. Blackburn’s state has many self-employed entrepreneurs who might appear richer on paper than they actually are, she said. “While they may have a higher gross, their net is very low,” she added.

“We’re going to look at total positive income as our metric,” Werfel said. He later added that “there would be no increased likelihood of an audit if they have less than $400,000 in total positive income.”

The IRS description of total positive income as “the sum of all positive amounts shown for the various sources of income reported on an individual income tax return and, thus, excludes losses” represents, effectively, a tally of income before taxpayers subtract their losses.

Total positive income is a metric the IRS usually applies to categorize audits, the Tax Foundation’s York noted. But one challenge of strict thresholds for more audits, she said, “is that it creates incentives for underreporting income” to stay under the line.

Compared with recent years, there are now more specifics about how the IRS will implement additional audits of higher-income taxpayers, said Janet Holtzblatt, a senior fellow at the Tax Policy Center.

“But still there are questions,” she noted, about how the agency will treat situations when taxpayers don’t provide full picture of their income.

Read on: Make sure the tax breaks you’re taking now won’t hammer you in retirement

Also: ‘This was a test’: IRS has handled more than 100 million returns already — Tax Day by the numbers

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April 20, 2023
Tesla’s Profit Margins Were Just Bad. The Stock Is Diving.

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Price wars have consequences, even for Tesla, the world’s most valuable car company.

Tesla‘s (ticker: TSLA) first-quarter earnings, reported Wednesday evening, met expectations, but its first-quarter automotive gross profit margins were bad. No matter how investors slice and dice the numbers, results will leave them with questions about EV demand and Tesla’s pricing strategy.

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April 20, 2023
Jobless claims climb to 245,000 and signal slight cooling in hot labor market

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The numbers: The number of Americans who applied for unemployment benefits last week rose by 5,000 to 245,000 and pointed to a small erosion in a robust U.S. labor market.

New jobless claims increased from a revised 240,000 in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.

The number of people applying for unemployment benefits is one of the best barometers of whether the economy is getting better or worse.

New jobless claims are still very low, but they have risen from less than 200,000 in January in a sign the labor market has cooled slightly as higher interest rates dampen U.S. growth.

Key details: Thirty-five of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Eighteen posted an increase.

Most of the increase in new jobless claims were in New York, where new filings typically rise during school breaks and fall immediately afterward.

Other states reported little change.

The number of people collecting unemployment benefits in the U.S., meanwhile, jumped by 61,000 to 1.87 million in the week ended April 8. That’s the highest level since November 2021.

The gradual increase in these so-called continuing claims suggests it’s taking longer for people who lose their jobs to find new ones.

Big picture: Wall Street is watching jobless benefits closely because it’s one of the first indicators to start blinking red when the U.S. is headed toward recession.

New jobless claims have crept higher this year after touching a 54-year low, pointing to some cooling in a hot labor market. But the labor market is still quite strong

The Federal Reserve wants the labor market to cool even further to temper a sharp increase in wages and help the bank combat high inflation. A series of interest-rate increases by the central bank have slowed the economy and eventually should curb the appetite for workers.

Looking ahead: “With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices,” said senior economic advisor Stuart Hoffman of PNC Financial Services.

“Our view remains that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain,” said chief economist Joshua Shapiro of MFR Inc.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.44%
and S&P 500
SPX,
-0.60%
were set to open lower in Thursday trades.

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April 20, 2023
Yellen says China acts illegally and tries to dominate rivals in speech on economic ties

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Treasury Secretary Janet Yellen on Thursday criticized China’s aid to companies as she set out how the U.S. wants to act versus the world’s number two-economy.

In excerpts of remarks for a speech to be delivered Thursday morning at the Johns Hopkins University’s School of Advanced International Studies, Yellen said China has acted illegally.

China in recent years has expanded support for its state-owned enterprises and domestic private firms to “dominate foreign competitors,” she said. “This strategy has been coupled with aggressive efforts to acquire new technological know-how and intellectual property – including through IP theft and other illicit means.”

Yellen also said the U.S. will prioritize national security interests even at the expense of the economy. “As in all of our foreign relations, national security is of paramount importance in our relationship with China. For example, we have made clear that safeguarding certain technologies from the PRC’s military and security apparatus is of vital national interest,” she said. She stressed that the U.S. will not just protects its own national security interests but also those “of our allies and partners” — likely an allusion to Taiwan — as well as human rights, she said.

Yellen also said the U.S. was seeking cooperation on global challenges, such as climate and debt distress. “We call on China to follow through on its promise to work with us on these issues – not as a favor to us, but out of our joint duty and obligation to the world. Tackling these issues together will also advance the national interests of both of our countries.”

Yellen made no mention of the tariffs imposed on China by the Trump administration that have been left in place by the Biden administration in the released excerpts. According to the Peterson Institute for International Economics, tariffs of 19% apply on roughly two-thirds of China’s exports. Chinese tariffs of 21% apply on 58% of U.S. exports.

A spokesperson for China’s commerce ministry said U.S. and Chinese officials met last week, discussing trade and communication, as a report said Commerce Secretary Gina Raimondo may visit Beijing and Shanghai.

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April 20, 2023
Facebook settlement: How to apply for some of Meta’s $725 million payout

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If you used Facebook between May 2007 and December 2022, the social-media giant may owe you some money.

A California judge preliminarily approved a $725 million settlement between Facebook parent Meta Platforms
META,
-1.01%
and users who say the company allowed their data to be viewed or shared by third parties, notably Cambridge Analytica, without their consent.

The judge’s approval was a precursor to the final approval hearing, which will take place in September, but people can begin submitting claims now to potentially get a cash payment.

Who does the Facebook settlement apply to?

The $725 million settlement applies to anybody who was a Facebook user in the U.S. between May 24, 2007 and Dec. 22, 2022. The class-action form simply states that people who were Facebook users during that period are eligible. It does not mention any required level of activity on the account.

It’s unclear if someone with multiple Facebook accounts would be entitled to more money than a person with a single account. To find out if you are included in the settlement group, you can email info@FacebookUserPrivacySettlement.com

When is the deadline to submit a claim?

The claim form must be submitted no later than Aug. 25, 2023.

The form can be completed online or downloaded and mailed to the settlement administrator at the following address: Facebook Consumer Privacy User Profile Litigation, c/o Settlement Administrator, 1650 Arch St., Suite 2210, Philadelphia, PA 19103.

How much money will you get?

As is typical with class-action lawsuits, the amount an individual will receive is dependent on a variety of factors.

The settlement form says the payment will vary based on how many people submit claims. Additionally, administrative costs and attorneys’ fees will be deducted from the settlement fund prior to its release.

See also: Mark Zuckerberg’s total 2022 pay rose because of the increased use of private aircraft

“Settlement payments will be distributed as soon as possible if the Court grants Final Approval of the Settlement and after any appeals are resolved,” the claim website notes.

How many people does this affect?

Because Facebook has so many users and because of the 16-year time frame for this settlement, there are millions of people who could submit a claim.

According to data compiled by Statista, total Facebook users in the U.S. numbered roughly 240 million in 2022.

What has Meta said about the lawsuit?

In December 2022, Meta agreed in principle to pay the settlement. At the time, a Meta spokesman said settling the class-action suit was “in the best interest of our community and shareholders.” The company added that it had revamped its privacy approach and “implemented a comprehensive privacy program.”

Despite agreeing to pay the settlement, “Meta expressly denies any liability or wrongdoing,” according to the lawsuit website.

Representatives for Meta didn’t immediately respond to MarketWatch’s request for comment on this story.

See also: NPR’s CEO sayd ‘I have lost my faith in the decision-making’ at Twitter under Elon Musk

The settlement comes as Meta is set to announce another round of layoffs this week.

Meta shares were down 0.95% in the early afternoon on Wednesday and have gained nearly 80% year to date, compared with the S&P 500’s
SPX,
-0.01%
8.11% gain in 2023.

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April 19, 2023
Tesla stock falls 6% as price cuts hit quarterly profit margins

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Tesla Inc. stock dropped more than 6% in the extended session Wednesday after the electric-vehicle maker narrowly missed quarterly expectations for its revenue and saw adjusted profit margins drop as it cut its EV prices.

Tesla
TSLA,
-2.02%
earned $2.5 billion, or 73 cents a share, in the first quarter, compared with $3.3 billion, or 95 cents a share, in the year-ago period. Adjusted for one-time items, the company earned 85 cents a share.

Revenue rose 24% to $23.3 billion. Ebitda profit margins dropped to 18.3%, from nearly 27% in the year-ago quarter, while operating margins dropped to 11%.

“We are taking a view that we want to keep making as many cars as we can,” Chief Executive Elon Musk said on a call with analysts after the results. “It’s a good time to increase our lead further.”

Analysts polled by FactSet expected Tesla to report adjusted earnings of 85 cents a share on sales of $23.6 billion. Adjusted profit margins were seen at around 20%.

Tesla’s margins “are still among the best in the industry,” Musk said on the call, adding that Tesla is betting that going for higher volumes and a larger EV fleet, one that in the future would be fully autonomous, are the right choices at the moment.

Later on in the call, Musk said he expects Teslas to be capable of being fully autonomous vehicles later this year. Musk has made similar, and ultimately unrealized, predictions on numerous other occasions.

The CEO also deflected a few follow-up questions around demand, commodity prices and other aspects of the business, saying in several instances that he lacked a “crystal ball” to peer through the future.

In a letter to shareholders accompanying results, Tesla said it expects “ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”

The company unveiled a fresh round of U.S. price cuts earlier Wednesday in a bid to boost demand amid concerns of a weakening economy, but that are also bound to cut into its profit margins.

Pricing will continue to “evolve upwards or downwards, depending on a number of factors,” the company said in the letter.

The drop in Ebitda profit margin to 18.3% “doesn’t concern me at this point in time,” since it was reasonably close to expectations, Bill Selesky at Argus Research said after the results. “I don’t see it as a huge miss.”

Profit margins are “still very healthy” compared with others in the auto industry and taking into consideration the economy, said Jeff Windau, an analyst at Edward Jones.

Even as profit margins take a hit, Tesla “will find a way to grow and grow profitably based on past performance and the fact that the business is already EV-ready,” said Alyssa Altman, a consultant at Publicis Sapient who looks into transportation and mobility issues.

“The company has a strong advantage against most other competitors who are either building their presence or recreating their business models to be focused on the EV customer and software product development,” Altman said.

Tesla said it expects to “remain ahead” of its long-term goal of increasing its production rate by 50% annually, producing 1.8 million vehicles in 2023. Tesla has “a shot at 2 million, but that’s the upside case,” Musk said on the call.

The Cybertruck, Tesla’s electric pickup truck, is on track to begin production later in the year at the Texas plant and Tesla continues to “make progress” on its next-generation EV platform, it said in the letter.

Don’t miss: Tesla to break ground at Texas lithium refinery in May

The company ended the quarter with cash and equivalents as well as investments of $22.4 billion, $217 million more than at the end of the fourth quarter.

The economy presents a “unique opportunity” for the company, Tesla said in the letter.

Tesla is aiming “to leverage our position as a cost leader. We are focused on rapidly growing production, investments in autonomy and vehicle software, and remaining on track with our growth investments.”

See also: Here’s how much Tesla short sellers have lost so far this year

In January, Tesla reported operating margins of 16% for the fourth quarter and 16.8% for all of 2022. First-quarter 2022 margins were “over 19%,” Tesla said last April.

Tesla pinned the drop in first-quarter operating margins in part to higher commodities, logistics and warranty prices, lower credit revenue, and increases in ramping up production of new battery cells.

Tesla stock has fallen about 46% in the past 12 months, compared with losses of around 7% for the S&P 500 index
SPX,
-0.01%.
So far this year, however, the stock is up 49%, compared with an advance of 8% for the S&P 500.

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April 19, 2023
Bed Bath & Beyond’s stock rallies toward longest win streak in 3 months

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Bed Bath & Beyond Inc.’s stock jumped 34.4% in morning trading Wednesday, as shares of the troubled home-goods retailer extended their meme-like bounce to a third straight session.

Shares of the embattled company and sometime meme stock ended Tuesday’s session up 22.5%, which followed a 17.6% surge on Monday. The rally was fueled by social-media speculation, according to retail trading platform Capital.com, which said that the bounce was not likely to last.

A three-day win streak would be the longest such streak since the four-day stretch that ended Jan. 12, 2023.

The rally came after Bed Bath & Beyond’s
BBBY,
+30.90%
stock closed at a record low of 24 cents on Friday following a 22.6% plunge in three days after the company disclosed a sale of more than 100 million shares. The retailer, which is attempting to stave off bankruptcy, said it could sell up to $300 million worth of stock.

Related: Bed Bath & Beyond stock’s meme-like bounce won’t last, analyst says

The company’s stock has fallen 81.6% in 2023, compared with the S&P 500’s
SPX,
-0.03%
gain of 8%.

It has been a tumultuous few months for the retailer, which announced another equity offering earlier this year. That came after a troubled couple of years marked by strategic missteps, cash burn, challenging underlying business trends and the impact of the COVID-19 pandemic. Earlier this month, the company issued a sales warning that sent the stock to a then-record low.

Bed Bath & Beyond is also pushing for a reverse stock split. In a recent filing, the company said a special meeting of shareholders would be held May 9 to vote on the proposal. The vote is on whether to effect a reverse stock split “at a ratio in the range of 1-for-10 to 1-for-20, with such ratio to be determined at the discretion of the Board,” according to the filing.

Stocktwits, a social platform for investors and traders, has been seeing plenty of activity related to Bed Bath & Beyond. “Sentiment and message volume on the platform saw an uptick yesterday and today compared to last week,” Tom Bruni, lead writer of the Daily Rip & Markets, Stocktwits’ newsletter, told MarketWatch.

Related: Bed Bath & Beyond’s stock hit record lows amid push for reverse stock split

“It’s important to point out that many retail investors’ positions with meme stocks are so underwater that the narrative is more so self-deprecating than enthusiastic, with tons of comments like ‘only needs to move up 5000% more, and I would break even!’,” he added.

Bruni also noted that companies that file for bankruptcy often end up rallying afterward, citing the recent example of National CineMedia Inc.
NCMI,
+6.89%,
whose stock popped last week after filing for Chapter 11 bankruptcy protection.

“A potential reason for this is investors may think that a reorganization may be the company’s best shot at surviving,” he told MarketWatch. “Investors may be betting that Bed Bath & Beyond might eventually have to take this route. However, we won’t know until next month’s reverse stock split vote takes place.”

Additionally, bankruptcy often sparks a short covering rally, according to Bruni, who notes that bearish investors don’t want to risk their profits in an attempt to squeeze the last bit of juice out of the stock. “When a company files for bankruptcy, it’s generally a sign your bearish thesis was correct, and you can take some chips off the table,” he added. “Very few investors will ride a stock to zero, as the risk isn’t worth it in many cases.”

Related: Bed Bath & Beyond has launched a ‘Hail Mary pass’ with latest partnership, says retail expert

“Also, at that point, there are few incentives for people down a lot on their investment to sell for a loss,” Bruni said. “They’d rather hold and see what happens.” Between “bag holders” and shorts covering, there’s more demand than supply for the stock, so prices go up, according to Bruni. “Then, that can feed on itself if that lasts for more than a few hours/days,” he added.

Earlier this month, Bed Bath & Beyond announced a new vendor consignment program with ReStore Capital in an attempt to boost its inventory. Carol Spieckerman, president of retail advisory firm Spieckerman Retail, told MarketWatch that the consignment plan feels like “a Hail Mary pass.”

Spieckerman said Bed Bath & Beyond is continuing “a mighty fight” amid mounting distractions, such as former chief executive Mark Tritton’s recent compensation lawsuit against the company. The lawsuit alleges that in January, Bed Bath & Beyond ceased making payments owed under Tritton’s separation agreement. Under the terms of the agreement, Bed Bath & Beyond was required to pay Tritton $6,765,000 in ratable installments over a 24-month period beginning in July 2022, according to the lawsuit. The payments were made from July 2022 to January 2023, it said.

Bed Bath & Beyond told MarketWatch that the company does not comment on legal matters.

Of eight analysts surveyed by FactSet who cover Bed Bath & Beyond, two have the equivalent of hold ratings and six have the equivalent of sell ratings.

Additional reporting by Tomi Kilgore.

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April 19, 2023
Tesla’s Price War Could Hit Its Profits

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Electric vehicle leader

Tesla

is expected to report lower earnings on higher sales Wednesday evening after the electric vehicle maker slashed prices to draw in buyers.

The EV war, with traditional auto makers spending billions to catch

Tesla

(ticker: TSLA), has morphed into a price war. The car maker’s quarterly earnings will help investors figure out who is winning.

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April 18, 2023
Netflix is sending its DVD-by-mail business to the Blockbuster graveyard

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Netflix Inc. is ending the DVD-by-mail business that first made it a household name and took down Blockbuster Video.

Netflix
NFLX,
+0.29%
executives announced Tuesday afternoon that the company will ship its last red DVD envelopes on Sept. 29, after 25 years. The business has dwindled in the past decade from more than $900 million in revenue in 2013 to less than $150 million last year.

“Our goal has always been to provide the best service for our members, but as the business continues to shrink that’s going to become increasingly difficult,” co-Chief Executive Ted Sarandos said in a blog post titled “Netflix DVD — The Final Season.”

Also see: Netflix stock falls after subscriber growth, earnings forecast miss. But it’s bouncing back on ad plans, shared-password crackdown in U.S.

Netflix launched as a DVD-by-mail service in an era that relied on physical media such as the discs to watch television shows and movies at home. The DVD business at the time was dominated by Blockbuster, which relied on brick-and-mortar stores that rented movies for a few days and charged late fees if they were not returned on time.

Netflix offered a different approach, allowing consumers to have a certain number of DVDs mailed to their home and return them at their leisure, which eventually led to the demise of Blockbuster. Eventually, the company began focusing on streaming media directly to consumers, and first offered that service for free to DVD subscribers.

Co-founder and former Chief Executive Reed Hastings — who announced he was stepping down from that position three months ago — decided to pivot from the successful DVD business to focus on streaming, which wasn’t an easy transition. When he announced that Netflix would sever the DVD and streaming businesses in 2011, effectively doubling the monthly price for consumers who wanted both offerings, it became one of the biggest debacles in Netflix history as consumers raged and canceled their subscriptions.

While the process was not easy — remember Qwikster? — Hastings’ vision for streaming services won out, with Netflix collecting roughly $31.5 billion in streaming subscription revenue last year, as the DVD business racked up $146 million. Some of the biggest names in entertainment and tech — Walt Disney Inc.
DIS,
+0.63%,
Apple Inc.
AAPL,
+0.75%,
Warner Bros. Discovery’s
WBD,
-1.79%
HBO, and many more — have followed Netflix’s path, and established streaming as one of the most dominant forms of media consumption.

For more: Netflix has changed drastically since its IPO —and is worth thousands of times more

“Those iconic red envelopes changed the way people watched shows and movies at home — and they paved the way for the shift to streaming,” Sarandos wrote in Tuesday’s announcement.

Netflix stock has also been a winner, despite a decline in late trading following earnings on Tuesday afternoon. Shares have increased more than 1,300% in the past decade, as the S&P 500 index
SPX,
+0.09%
has grown by about 167%.

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April 18, 2023
Netflix stock falls after subscriber growth, earnings forecast miss. But it’s bouncing back on ad plans, shared-password crackdown in U.S.

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Netflix Inc.’s stock initially plunged in after-hours trading Tuesday, after the streaming giant posted weaker subscriber growth and forecast a smaller profit than Wall Street expected. But shares later recovered and crossed into positive territory on company disclosures that its new ad-supported service is a success and its crackdown on shared accounts in the U.S. is coming this quarter.

Netflix
NFLX,
+0.29%
reported that subscribers increased by 1.75 million in the first quarter of the year, missing analysts’ average estimate of 2.2 million. Netflix reported fiscal first-quarter net earnings of $1.31 billion, or $2.88 a share, compared with $3.53 a share in the year-ago quarter.

Revenue improved to $8.16 billion from $7.87 billion a year ago. Analysts surveyed by FactSet had expected on average net earnings of $2.86 a share on revenue of $8.18 billion.

For the second quarter, Netflix executives guided for earnings of $2.84 a share on $8.24 billion in revenue, while analysts on average were expecting earnings of $3.07 a share on sales of $8.18 billion. Netflix no longer provides guidance on subscriber additions, a sign its years of rapid growth are clearly cooling.

Shares plunged lower than $300 in after-hours trading immediately following the release of the results, after closing with a 0.3% increase at $333.70. But shares had crossed into positive territory and were recently above $335 in the extended session.

Netflix executives have hoped to goose their financial results with cheaper, ad-supported options and a crackdown on password sharing. In a letter to shareholders Tuesday, company executives said the ads plan in the U.S. “already has a total ARM (subscription + ads) greater than our standard plan.”

At the same time, they disclosed a password crackdown in the U.S. will occur in the second quarter, a bit later from previous expectations.

“We shifted out the timing of the broad launch from late Q1 to Q2,” Netflix executives wrote. “While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a
better outcome for both our members and our business.”

Additionally, Netflix also announced that it will end the DVD-by-mail business that launched the company into consumers’ homes. Revenue from the DVD business had declined from $911 million in 2013 to $146 million in 2022.

“This a catch-22 environment for streaming companies as they are pivoting from chasing subscribers to chasing profits while at the same time inflation-weary consumers are reassessing their discretionary spending habits,” KPMG U.S. National Media Leader Scott Purdy said, in assessing the results. “Today’s figures, a bellwether for the industry at large, signal that winter is coming for the consumer. All of the subsidies are ending. Consumers can expect to be hit with ads, higher prices, and password sharing crackdown.”

Expectations among investors heading into Netflix’s quarterly report were muted. The focus was on Netflix’s switch toward better monetization with an ad-supported service and a rolling crackdown on shared accounts. Analysts in particular were closely watching the performance of Netflix’s new “Basic with Ads” plan ($6.99 a month) and its effectiveness in stanching the defection of subscribers to competing services from Walt Disney Co.
DIS,
+0.63%
and Apple Inc.
AAPL,
+0.75%.

Netflix’s rollout of the ad-supported tier could also have a temporary impact on margins: Netflix reported an operating margin of 21%, compared with about 25% in the year-ago quarter.

At the same time, Netflix put an end to paid shared accounts in some Latin American countries last year, and expanded plans to do so Canada, New Zealand, Portugal and Spain in February.

“In our view, the password-sharing crackdown will result in a greater number of subs as well as revenue because the primary account holder will either pay an additional fee for members who have moved out of the household or those sharing accounts become full subscribers,” Bank of America analysts said in a recent note.

Shares of Netflix have climbed 12% so far this year, while the broader S&P 500 index
SPX,
+0.09%
has advanced 8%.

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April 18, 2023
Netflix is sending its DVD-by-mail business to the Blockbuster graveyard

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Netflix Inc. is ending the DVD-by-mail business that first made it a household name and took down Blockbuster Video.

Netflix
NFLX,
+0.29%
executives announced Tuesday afternoon that the company will ship its last red DVD envelopes on Sept. 29, after 25 years. The business has dwindled in the past decade from more than $900 million in revenue in 2013 to less than $150 million last year.

“Our goal has always been to provide the best service for our members, but as the business continues to shrink that’s going to become increasingly difficult,” co-Chief Executive Ted Sarandos said in a blog post titled “Netflix DVD — The Final Season.”

Also see: Netflix stock falls after subscriber growth, earnings forecast miss. But it’s bouncing back on ad plans, shared-password crackdown in U.S.

Netflix launched as a DVD-by-mail service in an era that relied on physical media such as the discs to watch television shows and movies at home. The DVD business at the time was dominated by Blockbuster, which relied on brick-and-mortar stores that rented movies for a few days and charged late fees if they were not returned on time.

Netflix offered a different approach, allowing consumers to have a certain number of DVDs mailed to their home and return them at their leisure, which eventually led to the demise of Blockbuster. Eventually, the company began focusing on streaming media directly to consumers, and first offered that service for free to DVD subscribers.

Co-founder and former Chief Executive Reed Hastings — who announced he was stepping down from that position three months ago — decided to pivot from the successful DVD business to focus on streaming, which wasn’t an easy transition. When he announced that Netflix would sever the DVD and streaming businesses in 2011, effectively doubling the monthly price for consumers who wanted both offerings, it became one of the biggest debacles in Netflix history as consumers raged and canceled their subscriptions.

While the process was not easy — remember Qwikster? — Hastings’ vision for streaming services won out, with Netflix collecting roughly $31.5 billion in streaming subscription revenue last year, as the DVD business racked up $146 million. Some of the biggest names in entertainment and tech — Walt Disney Inc.
DIS,
+0.63%,
Apple Inc.
AAPL,
+0.75%,
Warner Bros. Discovery’s
WBD,
-1.79%
HBO, and many more — have followed Netflix’s path, and established streaming as one of the most dominant forms of media consumption.

For more: Netflix has changed drastically since its IPO —and is worth thousands of times more

“Those iconic red envelopes changed the way people watched shows and movies at home — and they paved the way for the shift to streaming,” Sarandos wrote in Tuesday’s announcement.

Netflix stock has also been a winner, despite a decline in late trading following earnings on Tuesday afternoon. Shares have increased more than 1,300% in the past decade, as the S&P 500 index
SPX,
+0.09%
has grown by about 167%.

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April 18, 2023
Employees asked about their canceled bonuses. The CEO warned them against living in ‘Pity City.’

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The chief executive of the high-end office-furniture company MillerKnoll has gone viral. And probably not in a manner she would prefer.

In a leaked Zoom call of a MillerKnoll staff town hall last month, CEO Andi Owen addressed concerns from employees about the company’s decision to withhold bonuses. It quickly descended into her lambasting staff for complaining about the move.

“Questions came through about, ‘How can we stay motivated if we’re not going to get a bonus?‘ ” she says in the meeting recording. Owen — tapped in 2021 by Fast Company as one of the most creative people in business and celebrated that same year in the New York Times for her navigation of the coronavirus pandemic and swing-state sociopolitics — tells employees of the Zeeland, Mich., company to focus on things the company can control, such as customer service.

From the archives (April 2021): Herman Miller and Knoll to merge in $1.8 billion deal that will create design leader as companies reimagine office

“Don’t ask about: What are we going to do if we don’t get a bonus?” she says, growing animated, even, apparently, agitated. “Get the damn $26 million. Spend your time and your effort thinking about the $26 million we need and not thinking about what you’re going to do if you don’t get a bonus. All right? Can I get some commitment for that? I would appreciate that.”

Though she didn’t specifically identify the significance of the $26 million figure, the company’s operating expenses rose by exactly that amount in its third quarter due to “voluntary and involuntary reductions in the company’s workforce and charges for the impairment of assets associated with the decision to cease operating fully as a stand-alone brand.”

MillerKnoll’s third-quarterly filing showed that the furniture maker — the product of a 2021 merger of the Herman Miller and Knoll brands, behind products such as the Eames lounge chair and the Saarinen Tulip table, respectively — expects lower sales in the fourth quarter after posting a decline in orders and sales margins in the three months ending March 4.

Owen recalls in the video that a past employer told her, “You can visit Pity City, but you can’t live there.”

“So, people, leave Pity City,” she continues, exclaiming: “Let’s get it done.”

“You have to be a psychopath to say this stuff to your employees when you are taking a massive bonus. Does she think they won’t find out?” asked one Twitter user.

“Plenty going on here but one of many things that leapt out to me was that mere moments after she went with the ‘be kind to people’ bit, she was yelling at workers,” another said.

The company said that the widely shared video clip had been taken out of context.

“Andi fiercely believes in this team and all we can accomplish together, and will not be dissuaded by a 90-second clip taken out of context and posted on social media,” a spokesman said in a statement.

Owen made $5 million last year. The company has yet to say how much she will make this year. The company this year has expensed $15.7 million in stock-based compensation.

MillerKnoll shares
MLKN,
-2.38%
have dropped 12% in 2023, compared with the 8% gain for the benchmark S&P 500
SPX,
+0.02%.

Other MillerKnoll brands include Design Within Reach, acquired by Herman Miller a decade ago and recognized as having made the iconic midcentury designs of Charles and Ray Eames, Isamu Noguchi, George Nelson, and others available to a wider, if affluent, audience without engaging an interior designer; the Danish design brand Hay; and Holly Hunt.

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April 18, 2023
Ericsson reports forecast-beating profit, but warns of choppy 2023

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STOCKHOLM–Ericsson AB on Tuesday posted a smaller-than-expected drop in first-quarter net profit, but cautioned that the operating environment will remain choppy in 2023 with poor visibility as operators remain cautious with spending plans and continue to adjust inventories.

The Swedish telecommunications-equipment company
ERIC.A,
+0.58%

ERIC.B,
+0.24%
said that customers in early 5G markets have slowed their deployment pace somewhat, while some customers have also lowered the elevated inventory levels built up in a tight supply environment. It expects this inventory adjustment to be mostly completed during the second quarter but might spill into the third quarter.

Overall sales in its key network unit fell 4% on the year in the first quarter, but strong sales mainly in India helped offset a 30% sales drop in North America.

Large roll-out projects weighed on networks gross margins in 1Q and will remain dilutive to gross margin in the short term, while network sales in 2Q are expected to be in line with 1Q, it added.

Ericsson reported net profit attributable to shareholders of 1.52 billion Swedish kronor ($146.9 million) compared with SEK2.94 billion a year earlier, as sales rose 14% to SEK62.55 billion.

Analysts polled by FactSet had expected net profit of SEK1.44 billion on sales of SEK60.95 billion.

Write to Dominic Chopping at dominic.chopping@wsj.com

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April 17, 2023
Why Snap is suddenly eligible to join the S&P 500

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Snap Inc.’s initial public offering led to changes that barred the company and others like it from joining major stock indexes, but at least one major index provider has decided to drop those limitations after less than six years.

S&P Dow Jones Indices announced Monday afternoon that a 2017 rule barring companies with multiple share classes from joining indexes such as the S&P 500
SPX,
+0.33%
has been dropped. The move comes after the index manager consulted with “market participants” at the end of last year to discuss several potential changes to the policy.

Snap
SNAP,
+1.78%
was the poster child for the initial change, after the parent company of the Snapchat mobile app went public in 2017 by selling a class of shares with no voting rights. That unprecedented move ensured that co-founders Evan Spiegel and Bobby Murphy would retain absolute power over their company even while selling shares to the public.

Snap’s move was an acceleration of an approach used by a generation of Silicon Valley tech companies to ensure that founders retained control of their companies even while selling shares to the public. Companies such as Facebook parent Meta Platforms Inc.
META,
-1.19%
and Google parent Alphabet Inc.
GOOGL,
-2.66%
GOOG,
-2.78%
used similar structures that provided their leaders with special shares that included increased voting rights, which Snap took further by offering no voting rights.

From 2017: Snap backlash, Facebook capitulation won’t stop founder-friendly stock structures

In response, FTSE Russell established rules about putting votes in the public’s hands while selling stock, and S&P Dow Jones Indices completely barred all companies that had multiple classes of stock from joining its core indexes. While FTSE Russell’s rule — which requires that at least 5% of votes rest in the hands of public investors — remains, S&P Dow Jones Indices will now drop its rule entirely, after roughly 80% of respondents voted in favor of a change in 2017.

There were other options besides completely dropping the rule. Participants in the consultation process were given several options and asked to rank them, including barring companies that only offer nonvoting stock to the public — such as Snap — or allowing companies that establish “sunset” provisions that would eventually revert all shares to equal voting rights.

Related: Investors want change, but founders like Mark Zuckerberg hold them off

Snap declined to comment Monday afternoon.

The change to allow all companies with multiple share classes to join the S&P Composite 1500 and its multiple component indexes is effective as of Monday, S&P Dow Jones Indices announced, though no changes were immediately made to any index. Tracking stocks will still not be eligible for inclusion, according to the announcement.

For more: As Snap melts down, its founders make sure to protect the people who matter — themselves

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April 17, 2023