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Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors
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Tag: Management Moves
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Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced
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Chevron Corp. released a second-quarter performance update that was better than expected on Sunday, ahead of the oil major’s earnings announcement this week.
Adjusted profit of $3.08 a share beat the consensus of $2.97 a share as tracked by FactSet. That is down about 47% from the second quarter last year and down from profit of $3.55 a share in the first quarter of 2023.
The company also announced its chief financial officer, Pierre Breber, is retiring after 35 years at the company. Eimear Bonner, the chief technology officer, will succeed him starting in March 2024.
Chief Executive Mike Wirth thanked Breber for his contributions and welcomed Bonner, a 24-year Chevron veteran, saying she can “build on Chevron’s strong foundation and drive further value for shareholders.”
Chevron
CVX,
+1.46%
said it had record quarterly production in the Permian Basin, 11% higher than last year’s second quarter. It produced 772,000 barrels of oil equivalent a day, and added that it is on-track for its full-year guidance. The Permian is a shale basin covering parts of West Texas and southeastern New Mexico.Quarterly shareholder distributions of $7.2 billion also set a record, Chevron said, including $4.4 billion in share buybacks and $2.8 billion in dividends.
Chevron expects to close the acquisition of shale driller PDC Energy in August.
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FedEx stock sinks on profit forecast, as Wall Street looks for progress on cost cuts; CFO to retire
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Shares of FedEx Corp. fell after hours on Tuesday after the package deliverer offered up a full-year profit forecast that fell short of expectations, as Wall Street zeroes in on the company’s efforts to cut billions in costs over its next two fiscal years following a drop-off in consumer demand.
Not long after the company released those results, FedEx also said
FDX,
-0.78%
that Chief Financial Officer Michael Lenz would retire on July 31. Management said it had begun an external search to fill the position. Lenz, who became CFO in March 2020, will serve as a senior adviser until Dec. 31 to help with the changeover.The company reported fourth-quarter net income of $1.54 billion, or $6.05 a share, compared with $558 million, or $2.13 a share, in the same quarter last year. Revenue fell to $21.9 billion, compared with $24.4 billion in the prior-year quarter.
Adjusted for goodwill, efforts to slim the business and a legal issue within FedEx’s
FDX,
-0.78%
ground delivery operations, FedEx earned $4.94 a share, compared with $6.87 a year ago.Analysts polled by FactSet expected adjusted earnings per share of $4.85, on revenue of $22.55 billion.
“The quarter’s results were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and U.S. domestic package yield improvement,” management said in a statement.
For the fiscal year ahead, which ends next May, FedEx forecast “flat to low-single-digit-percent” growth in sales, with earnings per share of $16.50 to $18.50. The company said it expects permanent reductions from its cost-cutting program — which it calls “DRIVE” — of $1.8 billion.
For the full year, analysts expect FedEx to earn $18.33 a share, on $90.91 billion in sales. FedEx ended its most recent fiscal year with $90.2 billion in sales.
Shares fell 4% after hours.
FedEx since last year has tried to slash billions in costs amid slowing demand for package deliveries, after inflation forced customers to rethink their spending priorities. It has nudged shipping prices higher, cut flights, cut executive jobs and closed offices. In April, FedEx announced plans to consolidate its air and ground operations into a single organization.
In the process, the delivery service’s stock price has rebounded significantly since getting slammed in September, when it warned of a slowdown in shipping demand. That rebound has put the stock in roughly in the same spot it was a year ago.
The company also reported earnings amid other tensions within the nation’s shipping and transportation infrastructure, after online-shopping demand during the pandemic led to higher shipping prices and thus a surge in profits.
While West Coast dockworkers and their employers reached a tentative deal on a contract last week, Teamsters union members at FedEx’s main rival, United Parcel Service Inc.
UPS,
-0.73% ,
voted to authorize a strike if UPS doesn’t offer them a contract they don’t like. The friction has led to worries that businesses and customers would have to pay more to have products delivered.[ad_2]
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Diageo PLC Names Debra Crew Chief Executive Officer
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By Joe Hoppe
Diageo said Friday that interim Chief Executive Officer Debra Crew has been appointed CEO, effective as of Thursday.
The London-based maker of Johnnie Walker Scotch whisky, Guinness stout and Smirnoff vodka had named Crew interim CEO on Monday, ahead of her planned joining date as CEO in July 1.
On Wednesday, Diageo said that longtime chief executive, Ivan Menezes, died after a short illness. He was 63.
Crew first joined the liquor giant as a nonexecutive director in 2019 before stepping down from the board the following year to lead the company’s business in North America, its largest market. She was promoted to chief operating officer in October 2022.
Write to Joe Hoppe at joseph.hoppe@wsj.com
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GameStop Shares Fall as It Terminates CEO and Ryan Cohen Becomes Executive Chairman
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GameStop Shares Fall as It Terminates CEO and Ryan Cohen Becomes Executive Chairman
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GameStop fires CEO, elects Ryan Cohen as executive chairman; stock plunges
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GameStop Corp. fired Chief Executive Matthew Furlong on Wednesday and said that its board had elected activist investor Ryan Cohen as its executive chairman, effective immediately.
Shares of the videogame retailer and meme stock sank 19% after hours following the brief press release detailing the move. That release did not offer a reason for Furlong’s firing and was made shortly ahead of the chain’s quarterly results.
GameStop
GME,
+5.75% ,
in its earnings release, said it would not be holding a conference call to discuss those results. But in a filing detailing those financials, the company said Cohen’s leadership would be good for shareholders.“We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders,” GameStop said.
Cohen, the co-founder and former CEO of online pet-supplies retailer Chewy Inc.
CHWY,
-4.10% ,
became GameStop’s board chairman in 2021, after joining the board that year and building up a stake in the company earlier. His influence at the company, as the Wall Street Journal reported in 2021, led to feuding with management and an explosion in popularity among the meme traders who helped launch GameStop’s stock higher. He also amassed and then sold off a stake in Bed Bath & Beyond, the home-goods retailer that is in the process of closing up shop.GameStop announced the move on Wednesday as it struggles to put up a consistent profit and tries to cut costs. Under Cohen’s control, the company has redoubled its focus on physical stores — as more of the gaming industry becomes more online and mobile — after initially making a bigger push toward e-commerce.
GameStop, in a separate filing on Wednesday, said Cohen’s responsibilities would include “capital allocation, evaluating potential investments and acquisitions, and overseeing the managers of the company’s holdings.”
In that filing, GameStop said that Furlong was fired without cause. According to his offer letter in 2021, Furlong is due any unvested stock that would have vested in the next six months. According to the terms outlined in that letter, Furlong would have been eligible to receive nearly $2.5 million in stock in August. He’ll also receive $100,000 in base salary. The filing also said Furlong had resigned as a company director.
The company also said it appointed Mark Robinson as its general manager and principal executive officer. Robinson has worked as vice president and general counsel at the company since January 2022, and held other roles at GameStop since 2015, the filing said.
GameStop also said it appointed Alain Attal as the lead independent director of the board and dissolved the Strategic Planning and Capital Allocation Committee.
For its first quarter, GameStop reported a net loss of $50.5 million, or 17 cents a share — far narrower than the $157.9 million, or 52 cents a share, in the same quarter last year. Net sales were $1.24 billion, down from $1.38 billion in the prior-year quarter. GameStop ended the quarter with cash and cash equivalents of $1.06 billion.
Popular videogames, such as “The Legend of Zelda: Tears of the Kingdom” and “Hogwarts Legacy,” seem likely to help GameStop’s sales up ahead. And the company has cut costs in an effort to improve profitability.
The company reported a profit in the prior quarter, helped by holiday-season demand. Still, the two analysts polled by FactSet don’t expect another profitable quarter until this year’s holiday quarter.
Wedbush analyst Michael Pachter, in a note last week, noted that broader challenges for the retailer include “a shift towards digital, mobile and subscription software (and away from the traditional packaged business).”
GameStop shares are down 29% over the past 12 months. By comparison, the S&P 500 Index
SPX,
-0.38%
is up 2.7% over that period.Jeremy Owens contributed to this story.
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Nestle Names New CFO
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By Mauro Orru
Nestle appointed Anna Manz from the London Stock Exchange Group to succeed Francois-Xavier Roger as chief financial officer after he decided to step down in pursuit of new professional challenges.
The Swiss packaged-foods giant said Tuesday that Manz would take over as soon as she is released from her present duties as chief financial officer and board member at the London Stock Exchange Group. Roger will remain in place until then, Nestle said.
“Anna has spent her career growing businesses and improving operational efficiencies,” said Chief Executive Mark Schneider. “Her deep knowledge of the consumer goods industry, combined with her extensive experience across many corporate functions, make her uniquely positioned to help lead Nestle into its next phase of value creation.”
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
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Elon Musk says he’s hired new CEO for Twitter; is it NBCUniversal’s Linda Yaccarino?
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Twitter Chief Executive Elon Musk says he’s found a new CEO to run Twitter and its parent company, X Corp., and “she” starts soon.
“Excited to announce that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks!” Musk tweeted Thursday afternoon. “My role will transition to being exec chair & [chief technology officer], overseeing product, software & sysops.”
Musk did not offer any clues as to the identity of Twitter’s incoming CEO, but late Thursday, the Wall Street Journal reported Linda Yaccarino, NBCUniversal’s head of advertising, was in talks to become the CEO.
Yaccarino has worked at Comcast’s
CMCSA,
+1.28%
NBCU for more than a decade, and has been an industry advocate in finding better ways to measure advertising’s effectiveness, according to the Journal.Yaccarino oversees global, national and local ad sales, partnerships, marketing, ad tech, data, measurement and strategic initiatives, according to her bio, which says she and her team have generated more than $100 billion in ad sales.
“She knows metrics in advertising, and has played in different media,” Timothy Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business, said in an interview. “I don’t know much about her, but she can balance Musk somewhat with her flexibility in advertising.”
She and Musk appeared in a keynote conversation at a conference in Miami last month, according to Dateline, before NBCU and Twitter inked a major ad pact for the 2024 Olympics.
Wedbush analyst Dan Ives said the move is good for the stock of Tesla Inc.
TSLA,
+2.10% ,
where Musk is also CEO.“Musk stepping down as Twitter CEO sooner than thought is clearly good news overall for Tesla investors,” Ives said on Twitter. “Less time focused on Twitter platform and more time around Tesla SpaceX…balancing act too difficult and needed to make this move sooner rather than later.”
In a note, Ives added: “With the tweet this afternoon, Musk’s reign as CEO of Twitter has finally come to an end and thus will be a positive for Tesla’s stock starting to finally remove this lingering albatross from the story,” and maintained Tesla’s outperform rating.
Tesla shares advanced 1.6% in after-hours trading.
After Musk acquired the social media giant for $44 billion, he posted a Twitter poll in December that asked if he should step down as CEO. A majority (57%) said yes, and he responded saying: “I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams.”
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Elon Musk says he’s hired new CEO for Twitter; is it NBCUniversal’s Linda Yaccarino?
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Twitter Chief Executive Elon Musk says he’s found a new CEO to run Twitter and its parent company, X Corp., and “she” starts soon.
“Excited to announce that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks!” Musk tweeted Thursday afternoon. “My role will transition to being exec chair & [chief technology officer], overseeing product, software & sysops.”
Musk did not offer any clues as to the identity of Twitter’s incoming CEO, but late Thursday, the Wall Street Journal reported Linda Yaccarino, NBCUniversal’s head of advertising, was in talks to become the CEO.
Yaccarino has worked at Comcast’s
CMCSA,
+1.28%
NBCU for more than a decade, and has been an industry advocate in finding better ways to measure advertising’s effectiveness, according to the Journal.“She knows metrics in advertising, and has played in different media,” Timothy Hubbard, assistant professor of management at the University of Notre Dame’s Mendoza College of Business, said in an interview. “I don’t know much about her, but she can balance Musk somewhat with her flexibility in advertising.”
Wedbush analyst Dan Ives said the move is good for the stock of Tesla Inc.
TSLA,
+2.10% ,
where Musk is also CEO.“Musk stepping down as Twitter CEO sooner than thought is clearly good news overall for Tesla investors,” Ives said on Twitter. “Less time focused on Twitter platform and more time around Tesla SpaceX…balancing act too difficult and needed to make this move sooner rather than later.”
In a note, Ives added: “With the tweet this afternoon, Musk’s reign as CEO of Twitter has finally come to an end and thus will be a positive for Tesla’s stock starting to finally remove this lingering albatross from the story,” and maintained Tesla’s outperform rating.
In December, Musk posted a Twitter poll asking if he should step down as CEO. A majority said yes, and he responded saying: “I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams.”
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Disney to increase price of ad-free streaming again, add Hulu to Disney+ and remove some content
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Walt Disney Co. will increase the cost of ad-free Disney+ subscriptions this year while adding Hulu content to the Disney+ streaming service and removing some shows from streaming entirely, executives announced Wednesday.
Disney
DIS,
-1.02%
executives have been making changes to their streaming strategy in an attempt to lose less money from offering its content directly to consumers over the internet. The company launched an ad-supported version of Disney+ in the U.S. and other countries late last year, and increased the cost of its ad-free offering at the same time, while increasing costs of other services.“Pricing changes we’ve already implemented have proven successful, and we plan to set a higher price for our ad-free tier later this year to better reflect the value of our content offerings,” Chief Executive Robert Iger said in a conference call Wednesday related to Disney’s quarterly earnings. “As we look to the future, we will continue optimizing our pricing model to reward loyalty and reduce churn, to increase subscriber revenue for the premium ad-free tier, and drive growth of subscribers who offer the lower-cost ad supported option.”
Full earnings coverage: Disney stock falls as Disney+ subscribers decline amid push to lose less money in streaming
Iger returned as chief executive of Disney late last year, and has been overseeing the evaluation of Disney’s streaming strategy. One of the biggest question marks is Hulu, of which Disney now owns two-thirds, with the option to buy the remaining interest from Comcast Corp.
CMCSA,
+0.61%
as early as January.Iger, though, has been rethinking the path for Hulu since returning. In an interview with CNBC earlier this year, he intimated that Disney could choose to sell the streaming service instead of buying the remaining interest. In his first big move with the service since returning, Iger said Wednesday that Hulu content would roll into Disney+ in the U.S. later this year.
“As a significant step toward creating a growth business, I’m pleased to announce that we will soon begin offering a one-app experience domestically that incorporates our Hulu content via Disney+,” Iger said in the conference call. “While we will continue to offer Disney+, Hulu and ESPN+ as stand-alone options, this is a logical progression of our [direct-to-consumer] offerings that will provide greater opportunities for advertisers while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience.”
Iger later clarified that the two apps will be combined only for those who subscribe to both.
“On the integrated app experience that we announced today, that’s more consumers that have subscribed to both services for now,” he said. “So in other words, it’s taking what we call the dual bundle and putting it together in one experience, which is obviously good for consumers. Why have to close out one app and open another one?”
For more: Disney is undergoing a ‘drastic evolution’ in streaming, and more changes could be afoot
After a wave of new streaming services appeared in recent years to compete with Netflix Inc.
NFLX,
+0.99% ,
media companies are looking to combine some of their offerings as consumers deal with a web of potential subscriptions. Paramount Global
PARA,
-4.11%
plans to combine its Paramount+ and Showtime streaming services, and Warner Bros. Discovery
WBD,
-2.76%
is planning to combine HBO Max with Discovery+ while renaming the service Max.When an analyst on Wednesday’s call suggested that Disney’s move revealed that Iger had decided to purchase the rest of Hulu, Iger responded by saying “it’s not really been fully determined what will happen in that regard.”
“Where we are headed is for one experience that would have general entertainment and Disney+ content together for the reasons that I just described,” Iger said. “How that ultimately unfolds is to some extent in the hands of Comcast and in the hands of basically a conversation or a negotiation that we have with them. I don’t want to be in any way predictive in terms of when or how that ends up.”
While adding Hulu content to Disney+, Disney will also remove some content from its streaming services, which will allow the company to save money that would be paid out as residuals for airing the content. Warner Bros. Discovery made similar moves as it looked to cut costs for its HBO Max streaming service last year.
“We will be removing certain content from our streaming platforms, and currently expect to take an impairment charge of approximately $1.5 billion to $1.8 billion,” Chief Financial Officer Christine McCarthy said in the conference call, without elaborating further.
For more: As streaming services cut costs, TV shows — and residuals — vanish
Iger did elaborate on his vision for streaming in his second earnings report since returning to the company, laying out his general thoughts about the path forward for Disney’s streaming portfolio — which also includes ESPN+ and a version of Disney+ in India and other parts of Asia refereed to as Disney+Hotstar.
“First, it’s critical we rationalize the volume of content we’re creating, and what we’re spending to produce our content. Second, our legacy platforms enable us to expand our audiences and often augment our potential streaming success while at the same time, allowing us to amortize our content costs across multiple windows,” he said. “We also need to strike the right balance between our local and global programming, as well as our platform and program marketing. Finally, we must continue calibrating our investments in specific markets.”
Disney shares declined in after-hours trading Wednesday following the release of quarterly results, which showed a sequential decline in Disney+ subscribers. The stock has gained 16.4% so far this year, as the S&P 500 index
SPX,
+0.45%
has gained 7.3%.[ad_2]
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U.S. stocks head for best day in 2 weeks on strong earnings from Meta and other big-tech names
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U.S. stocks rose on Thursday, on track for their biggest gain in two weeks, as another batch of strong big-tech earnings reports helped boost the broader market while offsetting signs of slowing economic growth.
How are stocks trading
On Wednesday, the Dow Jones Industrial Average fell 229 points, or 0.68%, to 33,302 as worries about First Republic Bank FRC overshadowed upbeat big-tech earnings.
What’s driving markets
For…
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NBCUniversal CEO Jeff Shell leaves company following misconduct investigation
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Jeff Shell, chief executive of Comcast Corp.’s NBCUniversal, abruptly left the company Sunday following an investigation into a complaint of inappropriate conduct.
“We are disappointed to share this news with you,” Comcast CMCSA CEO Brian Roberts and President Mike Cavanaugh said in a statement. “We built this company on a culture of integrity. Nothing is more important than how we treat each other. You should count on your leaders to create a safe and respectful workplace. When our principles and policies are violated, we…
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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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Sergio Ermotti returns as UBS CEO after Credit Suisse deal
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UBS Group AG said Wednesday that it has decided to appoint Sergio P. Ermotti as its new chief executive replacing Ralph Hamers, and said the change is a result of its planned acquisition of rival Credit Suisse Group AG.
The appointment of Mr. Ermotti–who was UBS’s UBS CH:UBSG CEO in the aftermath of the global financial crisis and stepped down in 2020 after nine years in the role–will become effective on April 5, the bank said.
Mr….
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Lyft brings in new CEO, pushing co-founders from helm after stock’s plunge
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Lyft Inc. is bringing in a new chief executive and removing its co-founders from running the ride-hailing company on a day-to-day basis, sending shares more than 3% higher in after-hours trading Monday.
Lyft
LYFT,
-2.74%
announced after markets closed Monday that board member David Risher will take over as CEO, replacing co-founder Logan Green. Green and Lyft’s other active co-founder — John Zimmer, who had been serving as president — will remain on the company’s board as chair and vice chair respectively, but not actively participate in running the company.“I’m honored and humbled that Logan, John, and the board have trusted me to lead Lyft,” Risher said in a letter to employees. “And I’ll start by saying this: I want Lyft to lead, and I’m thrilled to lead Lyft.”
Risher worked at Microsoft Corp.
MSFT,
-1.49%
in the 1990s before becoming employee No. 37 at Amazon.com Inc.
AMZN,
-0.09% ,
according to Lyft’s announcement, which noted that he received a permanent thank you on the Amazon website from founder and former chief executive Jeff Bezos upon his departure in 2002. For the past 13 years, he has been in charge of a nonprofit focused on childhood literacy called Worldreader.“Across all three organizations, I learned of the power of leading with purpose,” he wrote to employees. “Each organization derived tremendous energy through a singleness of purpose. It’s what attracted and retained great people, allowed us to make focused decisions and inspired our customers.”
In an interview with The Wall Street Journal, Risher — who has been on Lyft’s board since 2021 — admitted that Lyft faces competitive issues, seemingly referencing Uber Technologies Inc.
UBER,
-0.42% .
He mentioned “a very aggressive — very aggressive — competitor,” while adding, “I think being a strong No. 2 is a good place to be.”Lyft shares lost more than a third of their value in a single session in February after Green and Zimmer provided a forecast that missed expectations in what one analyst called “a debacle for the ages.” Monday’s announcement reiterated Lyft’s first-quarter guidance and said Lyft expects to report quarterly results in early May.
D.A. Davidson analyst Tom White told MarketWatch on Monday afternoon that the change at the top could be “a potential model positive.”
“A new leader with broader range of experiences could signal increased willingness to broaden Lyft’s strategic aperture a bit as it relates to other possible adjacent products (delivery?), partners, or ways to create value,” he wrote in an email.
Green and Zimmer began developing the company nearly 15 years ago, and launched the service in 2012, according to their separate letters to employees. They have jointly led the company since, including through a 2019 initial public offering that gave them special shares with stronger voting power.
From 2019: 5 things to know about the Lyft IPO
“To say I have loved leading Lyft is an understatement,” Green wrote in his letter to employees. “To say that I will miss working alongside you and this incredible team every day doesn’t even come close. This was an adventure of a lifetime, and I’ve loved every minute of it — the sweetness of the highs, and the pain of the lows that make you appreciate the next win that much more. I’m eternally grateful to this team.”
Lyft shares sold for $72 in its IPO, and closed Monday at $9.60 before moving closer to $10 in the extended session. Lyft stock has plummeted nearly 75% in the past 12 months, dropping 74.4% as the S&P 500 index
SPX,
+0.16%
has declined 12.6%.[ad_2]
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Amazon’s stock dips 1% as another 9,000 layoffs announced
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Amazon.com Inc. is eliminating another 9,000 jobs, the company announced Monday morning.
In a memo to staff, Amazon
AMZN,
-1.25%
Chief Executive Andy Jassy said the cuts would take place over the next few weeks and primarily affect Amazon Web Services, People Experience and Technology Solutions, advertising and Twitch. [Twitch CEO Dan Clancy broke the news of 400 layoffs to employees in a blog post later Monday.]“This was a difficult decision, but one that we think is best for the company long term,” Jassy wrote.
“For several years leading up to this one, most of our businesses added a significant amount of headcount,” Jassy added. “This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
The news sent the retailer’s stock down 1% in trading Monday.
The latest layoffs, amid a challenging macroeconomic climate that has claimed tens of thousands of jobs in the tech industry, follow an earlier round at Amazon, announced in November, that affected more than 18,000 employees. Additionally, Amazon has paused construction of its second headquarters in Virginia.
At the same time, there are rumblings out of the Beltway that the Biden administration is preparing legal actions against Amazon stemming from investigations into its business practices, according to a report in Politico.
Amazon is the second Big Tech company this month to announce additional job cuts. Last week, Mark Zuckerberg, CEO of Facebook parent Meta Platforms Inc.
META,
+1.12% ,
wrote in a blog post the social-networking company would slash 10,000 more employees as it focuses on a “year of efficiency.” The move drove Meta shares up 7% and helped the company top $500 billion in market value for the first time since June.In November, the company said it would cut 11,000 employees, or about 13% of its workforce, in the first layoffs in the company’s 18-year history.
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Dell stock falls after pessimistic outlook; company announces CFO change
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Dell Inc. on Thursday reported fourth-quarter and full-year results that beat Wall Street expectations, but executives issued a cautious outlook that weighed on the company’s stock in extended trading.
Dell
DELL,
-0.67%
shares initially jumped more than 6% higher after hours, after falling about 0.7% in the regular session to close at $40.17, before swinging to a loss after executives provided a cautious outlook on the earnings call. They are down almost 3% as of 5 p.m. Eastern time.The computer company posted record sales for the year, though its fourth-quarter sales were down year over year. But on the call, executives said both corporate and consumer spending are slowing, though they expected things to get better later in the year.
Chief Financial Officer Tom Sweet said on the call that he expects first-quarter revenue to be down 15% to 21% year over year, more than the seasonal average.
“The broad caution in the IT spending environment that we called out in Q2 continues,” Chuck Whitten, co-chief operating officer, said on the call.
Dell reported fourth-quarter net income of $606 million, or 84 cents a share, compared with a loss of $29 million, or 4 cents a share, in the year-ago period. Adjusted for stock-based compensation, amortization and other costs, earnings were $1.32 billion, or $1.80 a share. Revenue fell to $25 billion from almost $28 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted net income of $1.2 billion, or $1.64 a share, on revenue of $23.42 billion.
For the full year, Dell reported net income of $2.42 billion, or $3.24 a share, on revenue of $102.3 billion. Adjusted earnings were $7.61 a share, adjusted for stock-based compensation, amortization and other costs. Analysts had expected adjusted earnings of $7.46 a share on $100.6 billion in revenue.
The company also announced a 12% increase in its annual cash dividend, to $1.48 a share.
In addition, Sweet will retire at the end of the second quarter, and current corporate controller Yvonne McGill will become CFO at that time, according to a company news release.
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Genius Group CEO on why his company is fighting back against naked short sellers — and it’s not alone
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“It’s like being robbed in a library, but you can’t shout ‘Thief!’ because there are ‘Silence, please’ signs everywhere.”
That’s how Roger Hamilton, chief executive of Genius Group Ltd.
GNS,
+55.02% ,
describes the powerlessness he feels as U.S. securities rules prevent him from discussing his company’s share price, even as it comes under attack from a group of naked short sellers.The Singapore-based education company on Thursday announced it had appointed a former FBI director to lead a task force investigating alleged illegal trading in its stock that it first addressed in early January.
The news sent the stock up a record 290% on Thursday, and it climbed another 59% on Friday. Volume of about 270 million shares traded in Thursday’s session crushed the daily average of about 634,000 — another indicator, Hamilton told MarketWatch in an interview Friday, of wrongdoing, given that the company’s float is just 10.9 million shares. “Clearly, that’s far more shares than we created,” he said.
Genius Group has evidence from Warshaw Burstein LLP and Christian Levine Law Group, with tracking from Share Intel, that certain individuals and/or companies sold but failed to deliver a “significant” amount of its shares as part of a scheme seeking to artificially depress the stock price.
The company is now exploring legal action and is planning an extraordinary general meeting in the coming weeks to get shareholder approval for its planned actions. These include paying a special dividend as a way to flush out bad actors and working with regulators to share information.
Share Intel uses tracking software in real time to determine exactly where there are discrepancies in the market and where brokers are opening large positions, Hamilton said. The software can measure the number of shares that are being naked shorted and has found multiple instances where significant amounts of fake shares were being created, said Hamilton.
Naked short selling is illegal under Securities and Exchange Commission rules, but that hasn’t stopped the practice, which Hamilton said affects far more companies than is generally known.
In regular short trading, an investor borrows shares from someone else, then sells them and waits for the stock price to fall. When that happens the shares are bought cheaper and returned to the prior owner, with the short seller pocketing the difference as profit.
In naked short selling, investors don’t bother borrowing the stock first and simply sell shares with a promise to deliver them at a later date. When that promise is not fulfilled, it’s known as failure to deliver.
By repeating that process again and again, bad actors can generate massive profits and manipulate a stock’s price lower, with an ultimate goal of driving a company to bankruptcy, at which point all the equity is wiped out and the naked shorts no longer need to be covered.
Hamilton said the evidence gathered by Genius Group shows a great deal of the illegal activity is happening on U.S. exchanges, but there’s also activity happening off-exchange and involving dark pools.
The company is fighting back “because we want this to stop,” Hamilton told MarketWatch. “They’re taking value away from our shareholders. They’re predators. They’re doing something illegal, and we want it to stop, whether that means getting regulators to enforce existing regulations or put new ones in place.”
Public companies have to have committees to monitor and report internal fraud to protect shareholders, he said. But there is no such team looking for external fraud and many retail investors see stocks being manipulated, he said.
“Hopefully, regulations will change and regulators will see there are as many, if not more, threats from outside a company,” he said.
Genius Group is not alone, said Hamilton. He cited among other examples Torchlight, an oil- and gas-exploration company that decided to merge with Metamaterial Inc. to thwart a naked-short-selling attack.
The stock rose from 30 cents to $11 in the six months after the deal was completed, and the company was able to raise about $183 million through a combination of convertible debt and equity. An interview Hamilton conducted with Torchlight’s former CEO, John Brda, can be found below.
Then there’s Jeremy Frommer, CEO of Creatd Inc.
CRTD,
+4.14% ,
which aims to unlock creativity for creators, brands and consumers, who is behind Ceobloc, a website that aims to end the practice of naked short selling.“Illegal naked short selling is the biggest risk to the health of today’s public markets,” is how the site introduces its mission.
On Friday, the stock of Helbiz Inc.
HLBZ,
+65.48%
joined Genius Group in rocketing higher in high volume, after that company said it, too, was taking on naked short sellers.The New York–based maker of e-scooters and e-bicyles said that it was following Genius Group’s example and that it believes “certain individuals and/or companies may have engaged in illegal short selling practices that have artificially depressed the stock price.” The stock had plummeted 64% over the three months through Thursday’s close at 12.31 cents.
Genius Group’s stock, which went public in April 2022 at $6 a share, has gained more than 600% this week. The S&P 500
SPX,
+1.89%
has gained 1.1% over the same four trading sessions.[ad_2]
