Tag: Meta Platforms Inc

Big Tech falters on dreary earnings and forecasts for Q4— Meta has worst week ever, Amazon tumbles 13%

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Facebook CEO Mark Zuckerberg

Marlene Awaad | Bloomberg | Getty Images

Other than Apple, it was a brutal earnings week for Big Tech.

Alphabet, Amazon, Meta and Microsoft combined lost over $350 billion in market cap after offering concerning commentary for the third quarter and the remainder of the year. Between slowing revenue growth — or declines in Meta’s case — and efforts to control costs, the tech giants have found themselves in an unfamiliar position after unbridled growth in the past decade.

Third-quarter results this week came against the backdrop of soaring inflation, rising interest rates and a looming recession. Apple bucked the trend after beating expectations for revenue and profit. The stock on Friday had its best day in over two years.

On the opposite end of the spectrum was Meta, which has seen its stock price collapse in 2022. Facebook’s parent came up short on earnings, recorded its lowest average revenue per user in two years and said sales in the fourth quarter will likely decline for a third straight period.

“There are a lot of things going on right now in the business and in the world, and so it’s hard to have a simple ‘We’re going to do this one thing, and that’s going to solve all the issues,’” Meta CEO Mark Zuckerberg said on the company’s earnings call on Wednesday.

Meta’s stock had its worst week since the company’s IPO in 2012, plunging 24% over the past five days. Microsoft fell 2.6% for the week, due to a 7.7% decline on Wednesday after the company gave weak guidance for the year-end period and missed estimates for cloud revenue.

Things were also bleak at Amazon, which dropped 13%. A gloomy fourth-quarter forecast along with a dramatic slowdown in its cloud-computing unit were largely to blame for the sell-off.

While Amazon Web Services saw expansion slow to 27.5% from 33% in the prior period, Google’s cloud group, which is significantly smaller, sped up to almost 38% growth from around 36%. Google plans to keep spending in cloud even as it intends to rein in headcount overall growth in the next few quarters.

“We are excited about the opportunity, given that businesses and governments are still in the early days of public cloud adoption, and we continue to invest accordingly,” Ruth Porat, Alphabet CFO, said on a conference call with analysts on Tuesday. “We remain focused on the longer-term path to profitability.”

However, results from the rest of Google parent Alphabet were less impressive. The company’s core advertising business grew just slightly, and YouTube’s ad revenue dropped from the prior year. The reverse was true for Amazon, which is playing catchup to Google and Facebook in digital advertising. In Amazon’s ad business, revenue growth accelerated to 30% from 21%, topping analysts’ estimates.

“Advertisers are looking for effective advertising, and our advertising is at the point where consumers are ready to spend,” said Brian Olsavsky, the company’s finance chief. “We have a lot of advantages that we feel that will help both consumers and also our partners like sellers and advertisers.”

Analyst Aaron Kessler at Raymond James lowered his price target on Amazon stock to $130 from $164 after the results. But he maintained his equivalent of a buy rating on the stock and said the company’s “robust advertising growth” has the potential to help Amazon fatten up its margin.

As investors continue to rotate away from tech, they’re finding money-making opportunities in other parts of the market that had previously lagged behind software and internet names. The Dow Jones Industrial Average rose 3% this week, the fourth weekly gain in a row for the index. Prior to 2021, the Dow had underperformed the Nasdaq for five straight years.

WATCH: Wall Street set to open in the red as investors digest disappointing tech earnings

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Why the Dow is having a killer month as it heads for best October ever

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The Dow Jones Industrial Average has been criticized by some market watchers for being a poor barometer of equity-market performance given its relatively small sample size of just 30 stocks.

But this quality, along with the paucity of megacap technology names, has helped shepherd the index toward what’s expected to be its biggest October gain in its 126-year history.

With a month-to-date gain of 14%, the Dow
DJIA,
+2.57%
is on track for its best monthly performance since January 1976, when it rose 14.4%, according to Dow Jones Market Data. To clinch its best October ever, it only needs to hang on to a month-to-date gain of 10.65% by the time the U.S. market closes on Monday.

The Dow is still in a bear market and remains down more than 10% for the year to date. That compares, however, with year-to-date losses of 18.6% for the S&P 500
SPX,
+2.40%
and 29.6% for the Nasdaq Composite
COMP,
+2.74%.

What exactly has made the Dow’s October performance so stellar?

The blue-chip gauge is packed with energy and industrials stocks, which have been among the best performing sectors for the stock market since the start of the year, noted Art Hogan, chief market strategist at B. Riley Wealth Management.

These stocks have performed particularly well since the start of the latest quarterly earnings season, while megacap technology names like Meta Platforms Inc.
META,
+1.14%,
Amazon.com Inc.
AMZN,
-7.41%
and Alphabet Inc.
GOOG,
+4.28%
have sputtered after delivering results and guidance that disappointed Wall Street this week.

“It’s very tech-light, and it’s very heavy in energy and industrials, and those have been the winners,” Hogan said. “The Dow just has more of the winners embedded in it and that has been the secret to its success.”

See: Live markets coverage

The Dow is on track to log its highest close in at least two months on Friday as it outperforms both the S&P 500
SPX,
+2.40%
and Nasdaq Composite
COMP,
+2.74%.
Furthermore, it’s on track to climb for a sixth straight session, what would be its longest winning streak since May 27, according to DJMD.

Adding to the list of notable factoids, the average is also on track to log a fourth straight weekly gain, which would cement its longest winning streak since Nov. 5, 2021, when the index rose for five straight weeks.

Caterpillar Inc.
CAT,
+3.22%,
Chevron Corp.
CVX,
+0.75%
And Amgen Inc.
AMGN,
+2.21%
are the top-performing Dow stocks so far this month, having gained 29.3%, 21.2% and 18.3%, respectively, as of Friday.

In recent trade, the blue-chip average was up around 700 points, or 2.2%, on track for its biggest daily point and percentage gain in exactly one week.

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Lawmakers urge tech CEOs to do more to help Iranian protesters circumvent internet censorship

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Iranians protest to demand justice and highlight the death of Mahsa Amini, who was arrested by morality police and subsequently died in hospital in Tehran under suspicious circumstances.

Mike Kemp | In Pictures via Getty Images

A bipartisan group of 13 lawmakers urged several U.S. tech CEOs to do more to help Iranian people stay connected to the internet as their government seeks to censor communications amid ongoing protests.

The Iranian regime has taken aggressive measures to block citizens from the internet and anti-government messages as people across the country continue to protest its restrictive standards. The protests began after 22-year-old Mahsa Amini died while in the custody of Iran’s so-called morality police, who had accused her of improperly wearing her hijab, an Islamic head-covering for women.

In the letter to the CEOs of Amazon, Apple, Google, Meta, Microsoft and cloud service DigitalOcean, the lawmakers asked the executives to be “more proactive” in getting important services to Iran. The Treasury Department last month issued guidance on U.S. sanctions on Iran to make clear that social media platforms, video conferencing and cloud-based services that deliver virtual private networks can operate in Iran.

“While we appreciate some of the steps your companies have taken, we believe your companies can be more proactive in acting pursuant to the broad authorization provided in GLD-2,” the lawmakers wrote, referencing the general license used to issue sanctions guidance.

They specifically pointed to four different types of tools they’d like to see the companies work to get into the hands of the Iranian people: cloud and hosting services, messaging and communication tools, developer and analytics tools and access to app stores.

The lawmakers said these types of tools would help Iranian citizens stay connected to the internet in secure ways amid government-imposed shutdowns and reduce their reliance on domestic infrastructure. The availability of multiple secure communications tools would make it harder for the Iranian regime to shut down all of them at once, they wrote.

The lawmakers also said that giving the Iranian people access to developer tools and app stores would allow them to “create and harden” their own communications apps and security tools and give them a place to distribute them without government surveillance.

Reps. Tom Malinowski, D-N.J., Claudia Tenney, R-N.Y., and Sens. Bob Menendez, D-N.J. and Marsha Blackburn, R-Tenn., took the lead in the letter.

“Iranians are fearlessly risking their lives for their fundamental rights and dignity,” they wrote. “Your tools and services may be vital in their efforts to pursue these aspirations, and the United States should continue to make every effort to assist them.”

A Google spokesperson said in a statement the company is working on ways to “ensure continued access to generally available communications tools like Google Meet and our other Internet services.” Google launched location sharing in Iran on Google Maps in September to let people let loved ones know where they are and the Jigsaw team within Google is working to make its tool more widely available so users in Iran can run their own VPNs that resist blocking, the spokesperson added.

Meta did not provide a comment. The Facebook-owner had made Instagram and WhatsApp available in Iran, but the services have been restricted by the government.

The other companies named in the letter did not immediately respond to CNBC’s requests for comment.

WATCH: Protests in Iran spread throughout the country

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5 cheap industrial stocks with upside as investors look outside tech for the next leaders

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October 27, 2022

The biggest tech stocks have lost $3 trillion in market cap the last one year

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FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

So here’s a good trivia question: Of the “FAANG” megacap tech stocks, which has lost the most market value over the past year?

Amid the earnings-related bloodbath so far this week, there have been huge losses. Alphabet, Microsoft and Meta have already posted their results, and tumbled in the wake of the reports. Thursday afternoon, Amazon and Apple are on tap.

A staggering $3 trillion in combined market cap has been lost in one year. Most of the losses have occurred across six of these stocks, but it’s hard to leave Apple off the list.

Remarkably, Apple shares have basically been flat – losing a measly $35 billion, by comparison.

It’s also worth realizing that the total losses would have been much worse had Netflix shares not rebounded.

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October 27, 2022

Facebook parent Meta’s revenue, profit decline amid ad slump

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Facebook parent Meta on Wednesday reported that its revenue declined for a second consecutive quarter, hurt by falling advertising sales as it faces competition from TikTok’s wildly popular video app.

The quarter’s weak results raised fresh questions about whether Meta’s plans to spend $10 billion a year on the metaverse — a concept that doesn’t quite exist yet and possibly never will — is prudent while its main source of revenue is faltering.

The quarterly results from Meta Platforms Inc. sent its stock tumbling 19% in after-hours trading to $105.20. If the sell-off holds through Thursday’s regular trading day, it will be the lowest it’s been since 2016. The stock closed Wednesday down 61% for the year.

Meta’s disappointing results followed weak earnings reports from Google parent Alphabet Inc. and Microsoft this week. The Menlo Park, California, company earned $4.4 billion, or $1.64 per share, in the three month period that ended Sept. 30. That’s down 52% from, $9.19 billion, or $3.22 per share, in the same period a year earlier.

Analysts were expecting a profit of $1.90 per share, on average, according to FactSet.

Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted.

Some of the company’s investors are concerned Meta is spending too much money and confusing people with its focus on the metaverse, a virtual, mixed and augmented reality concept that few people understand — while it also grapples with a weakening advertising business.

“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency,” wrote Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, earlier this week in a letter to Meta CEO Mark Zuckerberg. “This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”

In addition to an accelerating revenue decline, Meta also forecast weaker-than-expected sales for the current quarter, further raising worries that the revenue slump is more of a trend than an aberration.

“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Zuckerberg said in a statement. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”

Meta said it expects staffing levels to stay roughly the same as in the current quarter — a departure from previous years’ double-digit workforce growth. The company had about 87,000 employees as of Sept. 30, an increase of 28% year-over-year.

“To return to stronger growth, Meta needs to turn its business around,” said Insider Intelligence analyst Debra Aho Williamson. “As Facebook Inc., it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it’s no longer that innovative groundbreaker.”

She added that “Meta would benefit from less priority on the metaverse and more on fixing its core business.”

Meta’s Reality Labs unit, which includes its metaverse and virtual reality efforts, had an operating loss of $3.67 billion in the third quarter, compared with a loss of $2.63 billion a year earlier. Its revenue was $285 million.

Meta said it expects Reality Labs operating losses in 2023 to “grow significantly year-over-year.”

Despite the revenue decline, Meta grew its user base. Facebook’s monthly active users were 2.96 billion as of Sept. 30, up 2% from a year earlier. And 3.71 billion people logged in to at least one of Meta’s family of apps — Facebook, Instagram, WhatsApp or Messenger — up 4% year-over-year.

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Metaverse-obsessed Mark Zuckerberg refuses to cut costs. It’s no wonder the stock tanked

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Meta Platforms' build-the-metaverse-or-die-trying approach to spending is incredibly frustrating.

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Facebook earnings cut in half, Meta stock sinks toward lowest prices in more than 6 years

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Facebook parent Meta Platforms Inc. on Wednesday became the latest tech titan tattooed by a precipitous drop in digital advertising, reporting less than half the profit it had in the same quarter a year ago and sending its stock plummeting toward the lowest prices in more than six years.

Meta
META,
-5.59%
posted third-quarter earnings of $4.39 billion, or $1.64 a share, down from $9.2 billion, or $3.22 a share last year. Total sales, most of which come from ads, were $27.17 billion, down from $29 billion a year ago. Both results missed the average forecast for profit of $1.90 a share and sales of $27.44 billion, according to analysts polled by FactSet.

Meta executives issued a fourth-quarter revenue forecast of $30 billion to $32.5 billion, while analysts were forecasting $32.3 billion.

Daily active users, which edged up 3% to 1.98 billion, were in line with analysts’ projections of 1.98 billion for the quarter.

“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”

In prepared comments, Meta’s departing chief financial officer David Wehner said it is “making significant changes across the board to operate more efficiently. We are holding some teams flat in terms of headcount, shrinking others and investing headcount growth only in our highest priorities. As a result, we expect headcount at the end of 2023 will be approximately in-line with third-quarter 2022 levels.”

Shares in Meta plunged nearly 20% in after-hours trading, which would put it at levels the stock has not seen since 2016 if the decline were to last into Thursday’s regular trading session. Meta’s stock has been among the worst in tech this year, crashing and burning 61% so far, while the broader S&P 500 index
SPX,
-0.74%
has declined 19% in 2022.

After closing with a 5.6% decline at $129.82, Meta shares cratered to less than $115 in after-hours trading; shares have not traded at that level in a regular session since the end of 2016, and have not closed that low since July 2016.

“Meta is on shaky legs when it comes to the current state of its business,” Insider Intelligence analyst Debra Aho Williamson said in a note late Wednesday. “Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today: Meta is under incredible pressure from weakening worldwide economic conditions, challenges with Apple’s AppTrackingTransparency policy, and competition from other companies, including TikTok, for users and revenue.”

In a conference call outlining the results, Wehner pointed out softness in advertising among buyers in online commerce, gaming and financial services.

Meta’s mess of a quarter came a day after Alphabet Inc.’s
GOOGL,
-9.14%

GOOG,
-9.63%
Google reported disappointing ad sales — it missed FactSet analyst estimates by $2 billion — and warned of a deepening pullback in online ad spending. Last week, Snap Inc.
SNAP,
-0.21%
posted slackening ad revenue that sent its shares tumbling more than 25%.

Meta announced the results two days after a hellacious Monday, when a major shareholder chastised its metaverse strategy and called for a 20% reduction in payroll costs, as well as a Bank of America note that downgraded the stock.

While acknowledging that some people object to Meta’s multibillion-dollar investment in the metaverse, Zuckerberg believes the investment will ultimately prove to be vitally important to Meta’s — and tech’s — future, he said in the conference call.

Meta executives have blamed inflation, a decline in ad sales, the war in Ukraine, supply-chain issues, increased competition from services such as TikTok, and — most significantly — wrenching changes Apple Inc.
AAPL,
-1.96%
made to its mobile operating system that make it more difficult for apps to track consumers in ads.

“We continue to see strategic diversification away from Meta by many advertisers, largely due to stubbornly high CPMs relative to other social platforms and persistent challenges in performance measurement,” Josh Brisco, group vice president of acquisition media at search-engine marketing company Tinuiti, told MarketWatch.

One factor is a 13% decline in traffic to the Facebook web page in September, year-over-year, according to new report from Similarweb
SMWB,
-0.47%.
“It’s been down all year, which makes you wonder if they’re going in too many directions — social media, the metaverse, Reels — and whether they are no longer the flavor of the month with competition from TikTok,” David Carr, senior insights manager at Similarweb, told MarketWatch.

“First and foremost, the discussion needs to pivot to how to build an engaged community of users,” Alex Howland, president and founder of Virbela, which builds virtual worlds, told MarketWatch. “And for that, the metaverse must improve or compliment real-world experiences in some way so that people find value and keep coming back.”

“Brands have to be focused on what is paying the bills now,” Mike Herrick, senior vice president of technology at Airship, an app-experience platform, told MarketWatch. “Metaverse is going to happen, but not during the life of this recession.”

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Apple’s new App Store rules over ‘boosted ads’ provoke Facebook again

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Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington on Oct. 17, 2019.

Andrew Caballero-Reynolds | AFP | Getty Images

Apple recently updated its App Store guidelines with changes that, yet again, impact Facebook’s ad business.

The new rule, introduced Monday, says that companies like Meta, which owns Facebook and Instagram, can offer apps that allow people to buy and manage advertising campaigns in dedicated apps without using Apple’s payment system, but it considers buying an ad in a social media app to be a digital purchase, from which Apple takes a 30% cut.

Meta wasn’t happy with the change. A Meta spokesperson told CNBC, “Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy.”

The episode is the latest skirmish from companies like Meta that feel that Apple has too much power over mobile distribution and the ever expanding and changing rules of Apple’s App Store, which is the only way to install apps on an iPhone.

Meta and Apple have been battling for years, but the rivalry has grown more heated recently after Apple introduced App Tracking Transparency in the iPhone operating system last year. The privacy feature allows users to decline to offer app developers like Meta a unique device ID that can be used to track ad performance. Meta says the change could cost it $10 billion this year.

Meta and Apple also appear poised to compete in the world of consumer hardware, after Meta released the Quest Pro headset and Apple has been developing a competing VR headset for years that could reportedly launch next year.

Apple told CNBC that even before the new guideline the company considered social boosts to be the kind of digital purchase that needed to use Apple in-app purchases, and that the rule is more of a clarification than a new restriction.

“For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase,” an Apple spokesman told CNBC. “Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required. This has always been the case and there are many examples of apps that do it successfully.”

This individual restriction has long been a sticking point, and Meta, back when it was still named Facebook, negotiated with Apple over social media boosts and whether they would fall under Apple’s digital purchase rules, according to The Wall Street Journal.

Boosting features are offered by several social media companies. But most, like Twitter, already use Apple’s in-app purchase mechanism that lists boosted posts for $9.99 on Apple’s App Store. TikTok sells coins, or a currency used to promote posts, through in-app purchases as well.

For Meta, it thinks Apple’s recent clarification crosses a line in taking a piece of advertising revenue, not just app sales. Meta points to previous Apple executive statements, some made as part of the Epic Games trial over App Store rules, where it said it didn’t take a cut of ads.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps,” the Meta spokesperson told CNBC.

Apple isn’t asking for a cut of every ad served through the Facebook or Instagram apps. But Meta clearly feels targeted by Apple’s increasing power over its platforms, and worries that the company could argue that it deserves a piece of Meta’s total ad sales through its ads manager app, according to The Verge, which first reported Meta’s complaint.

It’s unclear how big the boost market is. Most big advertisers use dedicated portals or apps to buy ads. Eric Seufert, an ads industry watcher and the founder of Mobile Dev Memo, wrote Monday that he suspects it is a “negligible proportion of revenue” to the social media companies.

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Is Meta a broken stock? Earnings will help answer some lingering questions

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Read: ‘Bear killers’ and crashes: What investors need to know about October’s complicated stock-market history

Stocks are having a stellar October. Why the bear-market rally may have more room to run.

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An earlier version of this story misstated the date of the U.S. midterm elections. They will be held Nov. 8, not Nov. 9.

Despite a raft of risky events that investors must face down over the coming weeks, some on Wall Street believe that the latest bear-market rally in stocks has more room to run.

Although the S&P 500
SPX,
+1.50%,
Dow Jones Industrial Average
DJIA,
+0.97%
and Nasdaq Composite
COMP,
+16.23%
remain mired in bear markets, stocks have been bouncing back from the “oversold” levels when the major indexes fell to their lowest levels in two years. Bear markets are known for sharp bounces, such as the rebound that took the S&P 500 up more than 17% from its mid-June low before sliding back down to set a new 2022 low on Oct. 12.

With that said, here are a few things for investors to keep in mind.

There’s plenty of event risk facing markets

On top of a deluge of corporate earnings this week, including some of the biggest megacap tech stocks like Microsoft Corp.
MSFT,
+1.07%
and Amazom.com Inc.
AMZN,
+0.64%,
investors will also receive some key economic data reports over the next couple of weeks — including a reading from the Fed’s preferred inflation gauge on Friday, and the October jobs numbers, set to be released on Nov. 4.

Beyond that, there’s also the Fed’s next policy meeting that concludes on Nov. 2. The Fed is widely expected to hike interest rates by another 75 basis points, the fourth “jumbo” hike this year.

Midterm U.S. elections, which will determine which party controls the House and Senate in the U.S. are slated to take place Nov. 8.

Investors are still trying to parse the Fed’s latest messaging shift

Investors cheered what some market watchers described as a coordinated shift in messaging from the Fed last week, conveyed via an Oct. 21 report from The Wall Street Journal that indicated the size of a December Fed rate increase would be up for debate, along with comments from San Francisco Fed President Mary Daly.

Still, the Fed isn’t expected to materially pivot any time soon.

Because the fact remains: there’s plenty of froth that needs to be squeezed out of markets after nearly two years of extraordinary monetary and fiscal stimulus unleashed in the wake of the COVID-19 pandemic, according to Steve Sosnick, chief strategist at Interactive Brokers.

“It’s easier to inflate a bubble than to pop it, and I’m not using the term ‘bubble’ facetiously,” he said during a phone interview with MarketWatch.

Richard Farr, chief market strategist at Merion Capital Group, played down the impact of the Fed’s latest “coordinated” shift in guidance during an interview with MarketWatch, saying the impact on the terminal fed-funds rate is relatively immaterial.

Fed-funds futures traders anticipate the upper end of the central bank’s key target rate will rise to 5% before the end of the first quarter of next year, and remain there potentially into the fourth quarter, although an earlier cut wouldn’t be a complete surprise, according to the CME’s FedWatch tool.

Market technicians believe stocks might move a little higher

So far, October isn’t shaping up to be anything like September, when stocks fell 9.3% to polish off the worst first nine months of a calendar year in two decades.

Instead, the S&P 500 has already risen more than 5.5% since the start of October despite briefly crashing to its lowest intraday level in more than two years following the release of the September consumer-price index report earlier this month.

Technical indicators suggest the S&P 500 can continue to build on last week’s gain, said Katie Stockton, a market strategist at Fairlead Strategies, in a note she shared with clients and MarketWatch.

According to her, the next key level to watch out for on the S&P 500 is north of 3,900, more than 100 points above where the index closed on Monday.

“Short-term momentum remains to the upside within the context of the year-to-date downtrend. Support near 3,505 was a natural staging ground for a relief rally, and initial resistance is near 3,914,” she said.

A key bear sees a tradeable opportunity

Mike Wilson, Morgan Stanley’s chief U.S. equity strategist and chief investment officer, has been one of Wall Street’s most outspoken bears for more than a year now.

But in a note to clients early this week, he reiterated that stocks were looking ripe for a bounce.

“Last week’s tactical bullish call was met with doubt from clients, which means there is still upside as we transition from Fire to Ice — falling inflation expectations can lead to lower rates and higher stock prices in the absence of capitulation from companies on 2023 EPS guidance,” Wilson said.

This earnings season is off to an good start

At this point, it’s safe to say that the third-quarter earnings season has vanquished fears that the Fed’s interest-rate hikes and gnawing inflation had already dramatically eroded profit margins, market strategists said.

The quality of earnings reported already has surpassed some of the early “whisper numbers” bandied about by traders and strategists, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

In aggregate, companies are reporting earnings 5.4% above expectations, according to data from Refinitiv shared with the media on Monday. This compares to a long-term average — since 1994 — of 4.1%.

However, when the energy sector is removed from the equation, expectations seem much more grim. The blended year-to-year earnings estimate for the third quarter is -3.6%, according to the Refinitiv data.

While investors are still waiting on earnings from roughly three-quarters of S&P 500 firms, according to FactSet data, some — like Morgan Stanley’s Wilson — are already looking toward next year as they expect the outlook for profits will darken substantially, possibly leading to an earnings recession — when corporate earnings shrink for two quarters in a row.

The outlook for the global economy remains dim

Speaking of energy, crude oil prices are flashing an ominous warning about expectations for the global economy.

“A lot of the weak oil reflects expectations that the global economy will be in recession and near recession,” said Steve Englander, global head of G-10 currency strategy at Standard Chartered.

West Texas Intermediate crude-oil futures
CLZ22,
+0.48%
settled lower on Monday, as lackluster import data from China and the end of the Communist Party’s leadership conference hinted at softening demand in the world’s second-largest oil consumer. Prices continued to decline early Tuesday.

Be wary of ‘fighting the Fed’

Investors remain worried that “something else might break” in markets, as MarketWatch reported over the weekend.

It’s possible that such fears inspired the Fed’s apparent guidance shift, Sosnick said. But the fact remains: anybody buying stocks while the Fed is aggressively tightening monetary policy should be prepared to tolerate losses, at least in the near term, he said.

“Simplest thing of all is: ‘don’t fight the Fed.’ If you’re trying to buy stocks now, what are you doing? It doesn’t mean you can’t buy stocks overall. But it means you’re fighting an uphill battle,” he said.

The VIX is signaling that investors expect a wild ride

Even as stocks extended their October rebound for another session on Monday, the Cboe Volatility Index
VIX,
-4.49%
remained conspicuously elevated, reflecting the notion that investors don’t anticipate the market’s wild ride will end any time soon.

The Wall Street “fear gauge” finished Monday’s session up 0.5% at 29.85 and it was trading just shy of the 30 level early Tuesday.

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Uber acquired Drizly for $1.1 billion in 2021.

October 25, 2022

FTC seeks to hold Drizly CEO accountable for alleged security failures, even if he moves to another company

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The Drizly application on a smartphone.

Tiffany Hagler-Geard | Bloomberg | Getty Images

In a new proposed settlement, the Federal Trade Commission is seeking to hold a tech CEO accountable to specific security standards, even if he moves to a new company.

The agency announced Monday that its four commissioners had voted unanimously to issue a proposed order against alcohol delivery platform Drizly and its CEO James Cory Rellas for allegedly failing to implement adequate security measures, which eventually resulted in a data 2020 breach exposing personal information on about 2.5 million consumers.

The FTC claims that despite being alerted to the security concerns two years before the breach, Drizly and Rellas did not do enough to protect their users’ information.

While settlements like this are not that uncommon for the FTC, its decision to name the CEO and have the stipulations follow him beyond his tenure at Drizly exemplifies an approach favored by Democratic Chair Lina Khan. Some progressive enforcers have argued that naming tech executives in their lawsuits should create a stronger deterrence signal for other potential violators.

The proposed order, which is subject to a 30 day public comment period before the commission votes on whether to make it final, would require Rellas to implement an information security program at future companies where he’s the CEO, a majority owner or a senior officer with information security responsibilities, provided the company collects consumer information from more than 25,000 people.

Though Republican Commissioner Christine Wilson voted with the agency’s three Democrats to impose the proposed settlement against Drizly, she objected to naming Rellas as an individual defendant. In a statement, Wilson wrote that naming Rellas will not result in putting “the market on notice that the FTC will use its resources to target lax data security practices.”

“Instead, it has signaled that the agency will substitute its own judgement about corporate priorities and governance decisions for those of companies,” she wrote, adding that given CEOs’ broad overviews of their businesses, it’s best left to companies rather than regulators to determine what the chief executive should pay regular attention to.

In a joint statement, Khan and Democratic Commissioner Alvaro Bedoya responded to Wilson’s argument, writing that “Overseeing a big company is not an excuse to subordinate legal duties in favor of other priorities. The FTC has a role to play in making sure a company’s legal obligations are weighed in the boardroom.”

Khan’s FTC has named other executives in past complaints, like when it named Meta CEO Mark Zuckerberg as a defendant in a lawsuit seeking to block the company’s proposed acquisition of virtual reality company Within Unlimited. But it later dropped him from the complaint after the company said Zuckerberg would not try to personally buy Within.

The order against Drizly would also require the company to destroy personal data it has collected but no longer needs, limit future data collection and establish a comprehensive security program including training for employees and controls on who can access data.

“We take consumer privacy and security very seriously at Drizly, and are happy to put this 2020 event behind us,” a Drizly spokesperson said in a statement.

Subscribe to CNBC on YouTube.

WATCH: The changing face of privacy in a pandemic

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October 24, 2022

Social media platforms brace for midterm elections mayhem

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A Facebook search for the words “election fraud” first delivers an article claiming that workers at a Pennsylvania children’s museum are brainwashing children so they’ll accept stolen elections.

Facebook’s second suggestion? A link to an article from a site called MAGA Underground that says Democrats are plotting to rig next month’s midterms. “You should still be mad as hell about the fraud that happened in 2020,” the article insists.

With less than three weeks before the polls close, misinformation about voting and elections abounds on social media despite promises by tech companies to address a problem blamed for increasing polarization and distrust.

While platforms like Twitter, TikTok, Facebook and YouTube say they’ve expanded their work to detect and stop harmful claims that could suppress the vote or even lead to violent confrontations, a review of some of the sites shows they’re still playing catchup with 2020, when then-President Donald Trump’s lies about the election he lost to Joe Biden helped fuel an insurrection at the U.S. Capitol.

“You would think that they would have learned by now,” said Heidi Beirich, founder of the Global Project Against Hate and Extremism and a member of a group called the Real Facebook Oversight Board that has criticized the platform’s efforts. “This isn’t their first election. This should have been addressed before Trump lost in 2020. The damage is pretty deep at this point.”

If these U.S.-based tech giants can’t properly prepare for a U.S. election, how can anyone expect them to handle overseas elections, Beirich said.

Mentions of a “ stolen election ” and “voter fraud” have soared in recent months and are now two of the three most popular terms included in discussions of this year’s election, according to an analysis of social media, online and broadcast content conducted by media intelligence firm Zignal Labs on behalf of The Associated Press.

On Twitter, Zignal’s analysis found that tweets amplifying conspiracy theories about the upcoming election have been reposted many thousands of times, alongside posts restating debunked claims about the 2020 election.

Most major platforms have announced steps intended to curb misinformation about voting and elections, including labels, warnings and changes to systems that automatically recommend certain content. Users who consistently violate the rules can be suspended. Platforms have also created partnerships with fact-checking organizations and news outlets like the AP, which is part of Meta’s fact-checking program.

“Our teams continue to monitor the midterms closely, working to quickly remove content that violates our policies,” YouTube said in a statement. “We’ll stay vigilant ahead of, during, and after Election Day.”

Meta, the owner of Facebook and Instagram, announced this week that it had reopened its election command center, which oversees real-time efforts to combat misinformation about elections. The company dismissed criticism that it’s not doing enough and denied reports that it has cut the number of staffers focused on elections.

“We are investing a significant amount of resources, with work spanning more than 40 teams and hundreds of people,” Meta said in a statement emailed to the AP.

The platform also said that starting this week, anyone who searches on Facebook using keywords related to the election, including “election fraud,” will automatically see a pop-up window with links to trustworthy voting resources.

TikTok created an election center earlier this year to help voters in the U.S. learn how to register to vote and who’s on their ballot. The information is offered in English, Spanish and more than 45 other languages. The platform, now a leading source of information for young voters, also adds labels to misleading content.

“Providing access to authoritative information is an important part of our overall strategy to counter election misinformation,” the company said of its efforts to prepare for the midterms.

But policies intended to stop harmful misinformation about elections aren’t always enforced consistently. False claims can often be buried deep in the comments section, for instance, where they nonetheless can leave an impression on other users.

A report released last month from New York University faulted Meta, Twitter, TikTok and YouTube for amplifying Trump’s false statements about the 2020 election. The study cited inconsistent rules regarding misinformation as well as poor enforcement.

Concerned about the amount of misinformation about voting and elections, a number of groups have urged tech companies to do more.

“Americans deserve more than lip service and half-measures from the platforms,” said Yosef Getachew, director of Common Cause’s media and democracy program. “These platforms have been weaponized by enemies of democracy, both foreign and domestic.”

Election misinformation is even more prevalent on smaller platforms popular with some conservatives and far-right groups like Gab, Gettr and TruthSocial, Trump’s own platform. But those sites have tiny audiences compared with Facebook, YouTube or TikTok.

Beirich’s group, the Real Facebook Oversight Board, crafted a list of seven recommendations for Meta intended to reduce the spread of misinformation ahead of the elections. They included changes to the platform that would promote content from legitimate news outlets over partisan sites that often spread misinformation, as well as greater attention on misinformation targeting voters in Spanish and other languages.

Meta told the AP it has expanded its fact-checking network since 2020 and now has twice as many Spanish-language fact checkers. The company also launched a Spanish-language fact-checking tip line on WhatsApp, another platform it owns.

Much of the misinformation aimed at non-English speakers seems aimed at suppressing their vote, said Brenda Victoria Castillo, CEO of the National Hispanic Media Coalition, who said that the efforts by Facebook and other platforms aren’t equal to the scale of the problem posed by misinformation.

“We are being lied to and discouraged from exercising our right to vote,” Castillo said. “And people in power, people like (Meta CEO) Mark Zuckerberg are doing very little while they profit from the disinformation.”

———

Follow the AP’s coverage of misinformation at https://apnews.com/hub/misinformation.

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October 21, 2022

Facebook shuttle bus drivers are losing their jobs as Meta slashes costs and employees stay home

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A car passes by Facebook’s corporate headquarters location in Menlo Park, California, on March 21, 2018.

Josh Edelson | AFP | Getty Images

Facebook’s plans to cut costs combined with the company’s relaxed remote work policies set the stage for a bunch of shuttle bus staffers to lose their jobs.

WeDriveU, a key vendor that Meta uses for its commuter shuttles, said it will be reducing staff in and around the social media company’s Silicon Valley headquarters by nearly 100 people beginning in November, according to an employment filing viewed by CNBC. Most are drivers, and some are dispatchers, operations managers and supervisors.

Meta shuttle vendor Hallcon Corporation, meanwhile, said it’s laying off 63 staffers from its San Francisco location around Nov. 25, due to a “significant draw down of client services,” according to a separate filing.

“Some employees may be maintained or recalled to work,” a human resources director at Hallcon wrote in the filing. “However, no Hallcon Company employee who is being laid off should count on being recalled.”

Meta has cut shuttle staffers from other contractor firms as well, according to Stacy Murphy, vice president of Teamsters Bay Area Local 853, a union with over 15,000 members in industries including transportation. Murphy said all of the layoffs are coming from one company: Meta.

Meta janitorial staff protests job cuts.

Silicon Valley Rising

“All four vendors are losing people,” Murphy said, referring to the companies that work with Meta.

The layoffs are landing as Meta looks to cut costs by 10% or more over the coming months in response to macroeconomic challenges and the company’s general underperformance. Meta reported its first-ever revenue decline in the second quarter and is expected to record another drop when third-quarter numbers land next week.

The stock is trading near its lowest since early 2019 and is one of the worst performers this year in the S&P 500.

Bus drivers who shuttled Facebook employees around the Bay Area as the company expanded at a rapid clip over the past decade are in a particularly precarious position. Not only is the company now pulling back on costs but it’s also maintaining more flexibility than its tech peers in allowing employees to work from wherever they want.

The company opened its office back up to employees in March but gave staffers the option to work remote permanently or in a hybrid model. Many of San Francisco’s small businesses are struggling to stay afloat because of the changes in the workplace.

Murphy, along with union members, plan to protest Facebook’s cuts, saying it’s “the worst time” to reduce staff as blue-collar workers face rising costs in a market that remains among the priciest in the country. “It’s crazy,” she said of the rising prices.

Hallcon and WeDriveU did not return requests for comment.

In July, CNBC reported that Meta had canceled a contract with custodial workers at its headquarters, resulting in job cuts. Earlier this month, janitorial service workers rallied outside of Meta Shop, a retail space in Burlingame, California, to protest working conditions as well as the cuts. The rally was organized by a labor coalition called Silicon Valley Rising and South Bay coalition. Workers held up signs that read “Justice for Janitors” and alleged the company isn’t treating its essential workers fairly.

Meta janitorial staff protests job cuts.

Silicon Valley Rising

Murphy said Meta has cut dozens of shuttle staff over the last three months but that the latest notification of layoffs represents “the biggest we’ve ever seen.”

Teamsters organized a rally for Thursday afternoon at the busiest intersection around Facebook’s headquarters to protest Meta’s cutbacks. Murphy said one of the union’s efforts is to put pressure on the company to ask employees to return to offices.

“Other tech companies are demanding they come back — why haven’t they?” Murphy said. “They want to stay at home and that impacts all of the people that support the company’s overall performance.”

WATCH: Big Tech faces concerning headwinds

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October 20, 2022

Meta documents show main metaverse is losing users and falling short of goals, report says

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Horizon Worlds, Meta‘s flagship metaverse for consumers, is failing to meet internal performance expectations, according to The Wall Street Journal, which reviewed internal company documents.

Meta initially aimed to reach 500,000 monthly active users in Horizon Worlds by the end of the year, but the current figure is less than 200,000, according to the report. Additionally, the documents showed that most users didn’t return to Horizon after the first month on the platform, and the number of users has steadily declined since spring, the Journal said.

Only 9% of worlds are visited by at least 50 people, and most are never visited at all, according to the report.

The report comes as the company’s stock falls, user numbers decline and advertisers cut spending. Meta shares are down 62% so far this year.

Meta rebranded from Facebook last year in order to reflect the company’s ambitions beyond social media. CEO Mark Zuckerberg has specifically been interested in building out the metaverse, which is a virtual world that allows users to work and play together.

As a result, Meta created Horizon Worlds, which is a network of virtual spaces where users can engage with one another as avatars. Individuals can access Horizon through Meta’s Quest virtual-reality headsets.

In an effort to drum up some excitement around the metaverse, Zuckerberg unveiled his company’s newest virtual reality headset, dubbed the Meta Quest Pro, at Meta’s Connect conference Tuesday. The device costs $1,500 and contains new technologies, such as an advanced mobile Snapdragon computer chip.

A Meta spokesman told The Wall Street Journal that the company continues to make improvements to the metaverse, which was always meant to be a multiyear project. Representatives for Meta didn’t immediately respond to CNBC’s request for comment.

Meta has said it will release a web version of Horizon for mobile devices and computers this year, but the spokesman didn’t have any launch dates to disclose.

Read the full Journal report here.

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October 15, 2022

Why Meta’s virtual-reality avatars are finally getting legs

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MENLO PARK, Calif. — Why is it so hard to build a metaverse avatar — a visual representation of ourselves in the digital world — that walks on two legs?

“I think everyone has been waiting for this,” said a cartoonish digital version of Meta CEO Mark Zuckerberg, unveiling his new avatar legs and jumping up and down at a virtual-reality event Tuesday. “But seriously, legs are hard. Which is why other virtual reality systems don’t have them either.”

Early avatar models introduced by Meta, as well as Microsoft, have been ridiculed for appearing as legless, waist-up bodies floating around their virtual worlds.

That’s in part because tech companies have been eager to show off their progress in building out virtual-reality environments while still working on the technical challenges of making avatars more human-like and realistic. Meta renamed itself from Facebook last year in hopes of jumpstarting its corporate transformation into a provider of metaverse experiences for work and play.

Zuckerberg described legs as “probably the most requested feature on our roadmap” and said they will be available soon on Meta’s Horizon virtual-reality platform. He said the challenge is perceptual, involving how the brain — taking in images seen though a virtual-reality headset — accepts a rendering based on how accurately it is positioned.

Legs are harder to render accurately because they’re often hidden from view.

“If your legs are under a desk or if your arms block your view of them, then your headset can’t see them directly,” he said.

Zuckerberg said the company has been working to improve how its artificial intelligence systems track and predict where legs and other body parts should be moving.

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October 12, 2022

Facebook owner Meta unveils $1,500 VR headset: Will it sell?

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Facebook parent Meta unveiled a high-end virtual reality headset Tuesday with the hope that people will soon be using it to work and play in the still-elusive place called the “metaverse.”

The $1,500 Meta Quest Pro headset sports high-resolution sensors that let people see mixed virtual and augmented reality in full color, as well as eye tracking and so-called “natural facial expressions” that mimic the wearer’s facial movements so their avatars appear natural when interacting with other avatars in virtual-reality environments.

Formerly known as Facebook, Meta is in the midst of a corporate transformation that it says will take years to complete. It wants to evolve from a provider of social platforms to a dominant power in a nascent virtual-reality construct called the metaverse — sort of like the internet brought to life, or at least rendered in 3D.

CEO Mark Zuckerberg has described the metaverse as an immersive virtual environment, a place people can virtually “enter” rather than just staring at it on a screen. The company is investing billions in its metaverse plans that will likely take years to pay off.

VR headsets are already popular with some gamers, but Meta knows that won’t be enough to make the metaverse mainstream. As such, it’s setting office — and home office — workers in its sights.

“Meta is positioning the new Meta Quest Pro headset as an alternative to using a laptop,” said to Rolf Illenberger, founder and managing director of VRdirect, which builds VR environments for businesses. But he added that for businesses, operating in the virtual worlds of the metaverse is still “quite a stretch.”

Meta also announced that its metaverse avatars will soon have legs — an important detail that’s been missing since the avatars made their debut last year.

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October 11, 2022

TikTok going big on US e-commerce? Job listings offer clues

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NEW YORK — TikTok appears to be deepening its foray into e-commerce with plans to operate its own U.S. warehouses, the kind of packing and shipping facilities more associated with Amazon or Walmart than the social media platform best known for addictive short videos.

In the past two weeks, TikTok has posted several job listings on LinkedIn looking for candidates to help it develop and grow its “Fulfillment by TikTok Shop” in the U.S. to accommodate sellers using the app. According to the listings, TikTok plans to provide warehousing, delivery and item return options to sellers.

A company spokesperson declined to comment on TikTok’s e-commerce plans in the U.S.

But the U.S. job listings offer a window into a possible U.S. e-commerce expansion. In some listings, TikTok says it is looking for a candidate who can manage a free return program, plan how to move inventory from one warehouse or business to another, and develop its fulfillment service in the U.S. In another listing for a position in Seattle, the company refers to a global e-commerce team and a team member who will be responsible for building a global warehousing network, signaling its plans could be much larger.

“The e-commerce industry has seen tremendous growth in recent years and has become a hotly contested space amongst leading Internet companies, and its future growth cannot be underestimated,” the company wrote in the job listings. “With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better e-commerce experience to our users.”

Axios first reported on the job postings.

Shopping on social media sites, known as social commerce, is a $37 billion market in the U.S., led by Meta, which owns Facebook and Instagram, according to Insider Intelligence. ByteDance, the Beijing-based company that owns TikTok, already runs a thriving social media marketplace on Douyin, its twin video app for the Chinese market. The TikTok spokesperson said the company is focused on “providing merchants with a range of product features and delivery options” in places it currently has e-commerce programs, such as Southeast Asia and the United Kingdom.

Insider Intelligence projects about 23.7 million U.S. shoppers are expected to make at least one purchase through TikTok this year by using affiliated links or conducting a transaction on the platform itself.

Some of those sales are already having an effect. Communities such as #BookTok, a corner of TikTok devoted to literature and reading, has been credited with driving a spike in the sales of print romance books this year. To accommodate more purchases on its app, TikTok said last summer it would partner with the Canadian e-commerce company Shopify to allow users to buy items directly on the app.

TikTok has been intensifying competition with Meta and other rivals, luring younger users — as well as popular influencers — from YouTube, Facebook and Instagram. The site’s bite-sized, entertaining clips are served up by an algorithm that often seems to know what people want before they do.

The results are difficult to ignore. In July, Meta posted its first revenue decline in history, due in part to competition from TikTok. YouTube, meanwhile, recently said it would make the creators of short-form videos eligible to join its revenue-sharing program. Previously, YouTube only allowed revenue sharing for longer videos.

Compared to digital advertising, ecommerce is a tiny source of revenue for Meta, and will likely be for TikTok for the foreseeable future. At the same time, TikTok executives are likely looking to broaden the company’s revenue sources beyond ads — a market dominated in the U.S. by Meta and Alphabet, which owns YouTube and Google.

Neil Saunders, managing director for GlobalData Retail, said TikTok’s reach and influence are helping it become a powerful force in advertising and sales and building out that capability with warehouses and other facilities would enable it to offer a complete service.

“This would both be an additional revenue stream and would improve the quality of the shopping experience for consumers,” Saunders said. But a serious move into warehousing would be an expensive undertaking, and TikTok would face established competitors in the likes of Amazon and Walmart.

“However, TikTok has a massive audience and a massive customer base, so it has more than enough demand for this to make sense,” Saunders said. “Provided TikTok maintains its popularity it could pose a threat to incumbents and prove to be a highly disruptive force.”

Others are taking a different tone.

“It’s idiotic,” said Wedbush analyst Michael Pachter. “They have no chance of competing and it is a complete waste of money and time.”

——————

Associated Press writer Barbara Ortutay in San Francisco contributed to this report.

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October 11, 2022

Meet the 10 biggest megadonors for the 2022 midterm elections

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With four weeks until Election Day, congressional candidates are on track to break midterm fundraising records, having raised nearly $2.5 billion so far this cycle. That’s already 70% more than what was raised during the 2014 cycle and just $200 million shy of the total raised during the full 2018 cycle.

This cycle has also seen record-shattering outside spending, topping $1 billion through the beginning of October, according to an OpenSecrets estimate.

The increase in spending and fundraising is due in large part to the involvement of millionaire and billionaire megadonors who have sought to influence the outcome of an election in which both chambers of Congress are in play.

“When megadonors pump millions of dollars into super PACs, they get to help call the shots,” said Michael Beckel, research director at Issue One, a nonpartisan political reform organization. “Massive spending from a megadonor can influence what issues are talked about on the campaign trail and in Congress.”

Super PACs are independent political action committees that can raise unlimited sums of money but are not allowed to coordinate with a candidate or campaign. Due to contribution limits, such as those restricting individuals’ candidate contributions to $2,900 per election per candidate, most megadonor spending goes to super PACs.

More context: These are the basics of campaign finance in 2020 — in two handy charts

A MarketWatch analysis of Federal Election Commission data through the end of September shows that these 10 business moguls and philanthropists are the biggest federal-level donors this cycle.

Read: These 3 races could determine whether Democrats or Republicans control the Senate in 2023

And see: If this seat flips red, Republicans will have ‘probably won a relatively comfortable House majority’

Top federal-level megadonors this cycle

Rank	Contributor	Total Contributions	For Republicans	For Democrats	Nonpartisan/Bipartisan
1	George Soros	$128,782,000	$0	$128,782,000	$0
2	Ken Griffin	$50,955,800	$50,955,800	$0	$0
3	Richard Uihlein	$49,117,000	$49,117,000	$0	$0
4	Sam Bankman-Fried	$39,931,000	$201,000	$37,725,000	$2,005,000
5	Jeff Yass	$32,754,000	$32,754,000	$0	$0
6	Peter Thiel	$30,189,000	$30,189,000	$0	$0
7	Fred Eychaner	$22,343,000	$0	$22,343,000	$0
8	Stephen Schwarzman	$21,870,000	$21,865,000	$0	$5,000
9	Larry Ellison	$21,003,000	$21,003,000	$0	$0
10	Ryan Salame	$18,932,000	$17,432,000	$0	$1,500,000

	Totals:	$415,877,000	$223,517,000	$188,850,000	$3,510,000

Source: MarketWatch analysis of FEC data as of Sept. 30, 2022
Note: Partisan breakdown includes non-party affiliated PACs with over 95% of their spending benefitting one party, data has been rounded to the nearest thousand

Big spending by itself doesn’t automatically mean winning. There have been notable instances of the financially strongest candidates losing (such as crypto-backed House candidate Carrick Flynn earlier this year and billionaire Michael Bloomberg’s self-financed presidential bid) — but money can certainly help put a candidate on the right track.

“Money alone doesn’t guarantee electoral success, but every candidate prefers to be the one with more money to spend,” Beckel said. He added: “Outside spending on behalf of a candidate isn’t a silver bullet that’s going to guarantee electoral success. But it goes a long way to boosting somebody’s name recognition, and to presenting them as a viable candidate — somebody who has the resources to run a competitive campaign.”

Information about the spending by the top 10 donors this cycle has been compiled from MarketWatch’s analysis of FEC data and filings, super PAC websites and previously reported comments. Read on to find out who are the top 10 biggest donors this cycle.

10. Ryan Salame — $19 million

Ryan Salame, the co-CEO of FTX Digital Markets, a subsidiary of cryptocurrency exchange FTX, founded a hybrid PAC earlier this year called American Dream Federal Action. The vast majority ($15 million) of the $19 million Salame has spent this cycle has gone into bankrolling the PAC, which has spent $2.4 million in independent expenditures supporting Illinois Republican Rep. Rodney Davis, $2 million supporting Republican Senate candidate Katie Britt from Alabama, and $1.2 million each supporting Arkansas GOP Sen. John Boozman and Brad Finstad, a GOP congressional candidate in Minnesota.

On its website, the PAC describes itself as “organization dedicated to electing forward-looking candidates — those who want to protect America’s long term economic and national security by advancing smart policy decisions now.” A representative for Salame didn’t respond to a request for comment.

9. Lawrence Ellison — $21 million

The co-founder of Oracle
ORCL,
+0.26%
has similarly bankrolled a PAC this election cycle — giving a total $20 million to Opportunity Matters Fund Inc. The super PAC has largely held onto its funds so far, recent FEC records show, having $17 million cash on hand as of the end of August. Of the independent expenditures it has made this cycle, it spent the most on Georgia Republican Senate candidate Herschel Walker ($1.3 million), Wisconsin Republican Sen. Ron Johnson ($1.3 million) and North Carolina Senate candidate and current Republican Rep. Ted Budd ($1.1 million). A representative for Ellison didn’t respond to a request for comment.

8. Stephen Schwarzman — $22 million

Billionaire Stephen Schwarzman, the CEO of private-equity giant Blackstone
BX,
-2.41%,
is the eighth biggest donor at the federal level this cycle. In March, Schwarzman gave $10 million to both the Senate Leadership Fund and Congressional Leadership Fund, super PACs aimed at obtaining a Republican majority in the Senate and House, respectively. A representative for Schwarzman didn’t respond to a request for comment.

7. Fred Eychaner — $22 million

Fred Eychaner has also contributed $22 million so far this cycle, but unlike most of the spending on this list, his has been directed toward Democratic causes. The chairman of Chicago-based Newsweb Corporation has given $9 million to the House Majority PAC and $8 million to the Senate Majority PAC, as well as just under $1.5 million to the Democratic National Committee and several hundred thousands to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee. A representative for Eychaner didn’t respond to a request for comment.

6. Peter Thiel — $30 million

Venture capitalist Peter Thiel was heavily involved in backing Ohio Republican J.D. Vance’s primary bid, giving $15 million in the spring to the Vance-aligned Protect Ohio Values PAC.

The massive primary investment was “historic” and record-setting, according to Beckel, who added that Thiel’s involvement in the Ohio Senate primary could mark “a new chapter of how mega donors are choosing to play in politics.”

“I think it’s become clear for a lot of megadonors that there are high stakes to a lot of primaries, and by spending in the primary, where there is typically lower turnout than in say, a statewide general election, they can get a lot of bang for their buck by investing in a primary election,” Beckel added.

Thiel has indicated that he doesn’t intend to put any more money toward Vance’s bid as he reportedly believes the Ohio candidate is on track to win, and instead will focus his funding on Arizona Republican Blake Masters’ bid to oust Democratic Sen. Mark Kelly in the final weeks leading up to the midterm election.

Thiel, known for his roles in PayPal
PYPL,
-1.69%,
Palantir
PLTR,
-0.25%
and Facebook
META,
-3.92%,
has also given a total $15 million to the Masters-aligned PAC, Saving Arizona, with his most recent contribution in July. Both Vance and Masters are venture capitalists, but Masters has worked with Thiel. He served as chief operating officer of Thiel Capital and president of the Thiel Foundation, and he co-authored a book on startups with Thiel in 2014. A representative for Thiel didn’t respond to a request for comment.

5. Jeff Yass — $33 million

Options trader Jeff Yass, who founded trading firm Susquehanna International Group, has contributed about $33 million on a federal level this cycle. Yass has given $15 million to the School Freedom Fund, or the equivalent of 97% of the PAC’s total fundraising. The group focuses on the issue of school choice, and its website states that some bureaucrats “hindered the development and education of our youth through school closures, mask mandates, critical race theory, and more.”

Aside from the School Freedom Fund, Yass’ other biggest contributions are to the conservative Club for Action ($6.5 million), Kentucky Freedom ($5 million), Protect Freedom ($2 million) and Crypto Freedom ($1.9 million). A representative for Yass didn’t respond to a request for comment.

4. Sam Bankman-Fried — $40 million

Sam Bankman-Fried, the founder and CEO of FTX, is the main funder behind Protect Our Future PAC, giving it $27 million of the $28 million it raised this cycle.

The organization says on its website that it focuses on promoting Democratic candidates championing pandemic preparedness and prevention “so this is the last time in our lifetime, and our children’s lifetimes, that we will face the devastation that has gripped communities across the U.S. since 2020.”

The group spent more than $10 million supporting Democrat Carrick Flynn’s House bid in Oregon. Flynn lost his primary in May by 18 points despite his massive outside spending advantage. In addition to Flynn, the group has made over $1 million in independent expenditures each supporting Democratic congressional candidates Lucy McBath, a current representative from Georgia; Jasmine Crockett of Texas, Adam Hollier of Michigan, Valerie Foushee of North Carolina and Shontel Brown, a current representative from Ohio.

Most of the other $10 million Bankman-Fried spent this cycle has gone to the House Majority PAC ($6 million) and the crypto PAC GMI ($2 million).

While the vast majority of his spending has supported Democratic candidates and causes, Bankman-Fried does not classify himself as an exclusively Democratic donor — for instance he gave $105,000 to the Alabama Conservatives Fund in June and $45,000 to the NRCC in July.

He told Politico in August that he is “legitimately worried about doing things that will make people view me as partisan when it’s not how I feel … because I think it both misses what I’m trying to do and makes it harder for me to act constructively.” A representative for the FTX boss didn’t respond to a request for comment.

3. Richard Uihlein — $49 million

Richard Uihlein is the founder of the shipping and business supply company Uline, and is a longtime conservative donor. This cycle has seen nearly $50 million in political spending by him, with just over half of it going to Club for Growth Action. Uihlein has also given about $14 million to Restoration PAC, an organization that says it is “dedicated to strengthening the foundations that made America the greatest nation in the world: God, family, education, and community.”

Uihlein’s next largest contributions are to the conservative Team PAC ($2.5 million) and the Arkansas Patriots Fund ($2.2 million), which earlier this year made ad buys favoring Republican Sen. John Boozman’s primary opponent. A representative for Uihlein didn’t respond to a request for comment.

2. Ken Griffin — $51 million

With $51 million in federal-level political spending, Ken Griffin, CEO of hedge fund Citadel, is the second most prolific donor this cycle.

The biggest beneficiaries are the Republican-aligned Congressional Leadership Fund with $18.5 million in contributions, the Senate Leadership Fund with $10 million and Honor Pennsylvania, a super PAC that backed Republican Dave McCormick’s Senate bid. McCormick lost in the primary to Mehmet Oz by less than a thousand votes.

While Griffin spent about $64 million during the last cycle, his $51 million figure this year marks by far the most he has spent during a midterm cycle. During the 2018 cycle, his contributions totaled less than $8 million.

A spokesperson for Griffin told MarketWatch that Griffin “supports leaders who are committed to protecting the American Dream and pursuing policies that will create a better future for the United States.”

“The right policies will focus on creating rewarding jobs, prioritizing public safety, and investing in a strong national defense,” his spokesperson said. “Preserving the American Dream will require that every child is well educated, can access great healthcare, and has the opportunity to succeed.”

1. George Soros — $129 million

Not one donor comes close to matching the sum that billionaire philanthropist George Soros has contributed this cycle: $129 million. However, much of that money hasn’t actually been put to work this cycle.

The majority of those on this list have focused their funding on Republican causes, but Soros’ money has gone to Democratic groups — specifically Democracy PAC II, whose $125 million in contributions comprises 99% of its fundraising. The super PAC spent more than $80 million on Democratic groups and candidates during the 2020 election.

A representative for Soros pointed MarketWatch to a Politico article from January, in which Soros said the $125 million is aimed at supporting pro-democracy “causes and candidates, regardless of political party” who are invested in “strengthening the infrastructure of American democracy: voting rights and civic participation, civil rights and liberties, and the rule of law” and called his contribution a “long-term investment” that will support political work beyond this year.

So far this cycle, Democracy PAC has spent very little and holds $113 million in available cash. Contributions the PAC has made this cycle include $5 million to the Senate Majority PAC, $2.5 million to One Georgia and $1 million to both Care in Action and House Majority PAC.

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