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Biden to Urge Quadrupling New 1% Tax on Stock Buybacks
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Tag: Ownership changes
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Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss
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Meta Platforms Inc. shares soared in after-hours trading Wednesday despite an earnings miss, as the Facebook parent company guided for potentially more revenue than Wall Street expected in the new year and promised more share repurchases amid cost cuts.
Meta
META,
+2.79%
said it hauled in $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago but stronger than expectations. Earnings were $4.65 billion, or $1.76 a share, compared with $10.3 billion, or $3.67 a share, last year.Analysts polled by FactSet expected Meta to post fourth-quarter revenue of $31.55 billion on earnings of $2.26 a share, and the beat on sales coincided with a revenue forecast that also met or exceeded expectations. Facebook Chief Financial Officer Susan Li projected first-quarter sales of $26 billion to $28.5 billion, while analysts on average were projecting first-quarter sales of $27.2 billion.
Shares jumped more than 19% in after-hours trading immediately following the release of the results, after closing with a 2.8% gain at $153.12.
Alphabet Inc.’s
GOOGL,
+1.61% GOOG,
+1.56%
Google and Pinterest Inc.
PINS,
+1.56%
benefited from Meta’s results, with shares for each company rising more than 4% in extended trading Wednesday.“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”
Read more: Snap suffers worst sales growth yet in holiday quarter, stock plunges after earnings miss
Facebook’s 2 billion-user milestone was slightly better than analysts expected for user growth on Meta’s core social network. Daily active users across all of Facebook’s apps neared, but did not crest, another round number, reaching 2.96 billion, up 5% from a year ago.
Meta has been navigating choppy ad waters as it copes with increasing competition from TikTok and fallout from changes in Apple Inc.’s
AAPL,
+0.79%
ad-tracking system in 2021 that punitively harmed Meta, costing it potentially billions of dollars in advertising sales. Meta has invested heavily in artificial-intelligence tools to rev up its ad-targeting systems and making better recommendations for users of its short-video product Reels, but it laid off thousands of workers after profit and revenue shrunk in recent quarters.The cost cuts seemed to pay off Wednesday. While Facebook missed on its earnings, it noted that the costs of its layoffs and other restructuring totaled $4.2 billion and reduced the number by roughly $1.24 a share.
Meta executives said they now expect operating expenses to be $89 billion to $95 billion this year based on slower salary growth, cost of revenue, and $1 billion in savings from facilities consolidation — down from previous guidance for $94 billion to $100 billion. Capital expenditures are expected to be $30 billion to $33 billion, down from previous guidance of $34 billion to $37 billion, as Meta cancels multiple data-center projects.
In a conference call with analysts late Wednesday, Zuckerberg called 2023 the “year of efficiency” after 18 years of unbridled growth. He recommitted to Meta’s emphasis on AI and the metaverse, a platform for “better social experiences” than the phone, he said.
“The reduced outlook reflects our updated plans for lower data-center construction spend in 2023 as we shift to a new data-center architecture that is more cost efficient and can support both AI and non-AI workloads,” Li said in her outlook commentary included in the release.
Meta expects to increase its spending on its own stock. The company’s board approved a $40 billion increase in its share-repurchase authorization; Meta spent nearly $28 billion on its own shares in 2022, and still had nearly $11 billion available for buybacks before that increase.
“Investors are cheering Meta’s plans to return more capital to shareholders despite worries over rising costs related to its metaverse spending,” said Jesse Cohen, senior analyst at Investing.com.
“At first glance…Meta getting its mojo back,” Baird Equity Research analyst Colin Sebastian said in a note late Wednesday. “Results and guidance look particularly solid after Snap’s dismal report; however, further cuts to operating and capital expenditures announced this afternoon were perhaps the biggest surprise.”
UBS analyst Lloyd Walmsley said he anticipates double-digit revenue growth exiting 2023 and strong growth in earnings and free cash flow.
The results came a day after Snap Inc.
SNAP,
-10.29%
posted fourth-quarter revenue of $1.3 billion, flat from a year ago and the worst year-over-year sales growth Snap has ever reported. But they also arrived on the same day Facebook scored a major win in a California court. The company successfully fended off the Federal Trade Commission bid to win a preliminary injunction to block Meta’s planned acquisition of VR startup Within Unlimited.Read more: Meta wins bid to buy VR startup Within Unlimited, beating U.S. FTC in court: report
Meta shares have plunged 53% over the past 12 months, while the broader S&P 500 index
SPX,
+1.05%
has tumbled 10% the past year.[ad_2]
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Altria Beats Earnings Estimates, Unveils $1 Billion Stock Buyback
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Marlboro maker
Altria
Group beat earnings and revenue estimates in the fourth quarter and announced a new $1 billion share buyback plan.The cigarettes company reported adjusted earnings per share (EPS) of $1.18 on revenue of $6.1 billion in the final three months of the year. Analysts expected EPS of $1.17 on sales of $5.15 billion in the quarter, according to FactSet data.
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Why naked short selling has suddenly become a hot topic
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Short selling can be controversial, especially among management teams of companies whose stocks traders are betting that their prices will fall. And a new spike in alleged “naked short selling” among microcap stocks is making several management teams angry enough to threaten legal action:
Taking a long position means buying a stock and holding it, hoping the price will go up.
Shorting, or short selling, is when an investor borrows shares and immediately sells them, hoping he or she can buy them again later at a lower price, return them to the lender and pocket the difference.
Covering is when an investor with a short position buys the stock again to close a short position and return the shares to the lender.
If you take a long position, you might lose all your money. A stock can go to zero if a company goes bankrupt. But a short position is riskier. If the share price rises steadily after an investor has placed a short trade, the investor is sitting on an unrealized capital loss. This is why short selling traditionally has been dominated by professional investors who base this type of trade on heavy research and conviction.
Read: Short sellers are not evil, but they are misunderstood
Brokers require short sellers to qualify for margin accounts. A broker faces credit exposure to an investor if a stock that has been shorted begins to rise instead of going down. Depending on how high the price rises, the broker will demand more collateral from the investor. The investor may eventually have to cover and close the short with a loss, if the stock rises too much.
And that type of activity can lead to a short squeeze if many short sellers are surprised at the same time. A short squeeze can send a share price through the roof temporarily.
Short squeezes helped feed the meme-stock craze of 2021 that sent shares of GameStop Corp.
GME,
+10.45%
and AMC Entertainment Holdings Inc.
AMC,
+2.54%
soaring early in 2021. Some traders communicating through the Reddit WallStreetBets channel and in other social media worked together to try to force short squeezes in stocks of troubled companies that had been heavily shorted. The action sent shares of GameStop soaring from $4.82 at the end of 2020 to a closing high of $86.88 on Jan. 27, 2021, only for the stock to fall to $10.15 on Feb. 19, 2021, as the seesaw action continued for this and other meme stocks.Naked shorting
Let’s say you were convinced that a company was headed toward financial difficulties or even bankruptcy, but its shares were still trading at a value you considered to be significant. If the shares were highly liquid, you would be able to borrow them through your broker for little or almost no cost, to set up your short trade.
But if many other investors were shorting the stock, there would be fewer shares available for borrowing. Then your broker would charge a higher fee based on supply and demand.
For example, according to data provided by FactSet on Jan. 23, 22.7% of GameStop’s shares available for trading were sold short — a figure that could be up to two weeks out-of-date, according to the financial data provider.
According to Brad Lamensdorf, who co-manages the AdvisorShares Ranger Equity Bear ETF
HDGE,
-2.65% ,
the cost of borrowing shares of GameStop on Jan. 23 was an annualized 15.5%. That cost increases a short seller’s risk.What if you wanted to short a stock that had even heavier short interest than GameStop? Lamensdorf said on Jan. 23 that there were no shares available to borrow for Carvana Co.
CVNA,
+10.63% ,
Bed Bath & Beyond Inc.
BBBY,
-12.24% ,
Beyond Meat Inc.
BYND,
+11.31%
or Coinbase Global Inc.
COIN,
+1.45% .
If you wanted to short AMC shares, you would pay an annual fee of 85.17% to borrow the shares.Starting last week, and flowing into this week, management teams at several companies with microcap stocks (with market capitalizations below $100 million) said they were investigating naked short selling — short selling without actually borrowing the shares.
This brings us to three more terms:
A short-locate is a service a short seller requests from a broker. The broker finds shares for the short seller to borrow.
A natural locate is needed to make a “proper” short-sale, according to Moshe Hurwitz, who recently launched Blue Zen Capital Management in Atlanta to specialize in short selling. The broker gives you a price to borrow shares and places the actual shares in your account. You can then short them if you want to.
A nonnatural locate is “when the broker gives you shares they do not have,” according to Hurwitz.
When asked if a nonnatural locate would constitute fraud, Hurwitz said “yes.”
How is naked short selling possible? According to Hurwitz, “it is incumbent on the brokers” to stop placing borrowed shares in customer accounts when supplies of shares are depleted. But he added that some brokers, even in the U.S., lend out the same shares multiple times, because it is lucrative.
“The reason they do it is when it comes time to settle, to deliver, they are banking on the fact that most of those people are day traders, so there would be enough shares to deliver.”
Hurwitz cautioned that the current round of complaints about naked short selling wasn’t unusual and even though short selling activity can push a stock’s price down momentarily, “short sellers are buyers in waiting.” They will eventually buy when they cover their short positions.
“But to really push a stock price down, you need long investors to sell,” he said.
Different action that can appear to be naked shorting
Lamensdorf said the illegal naked shorting that Verb Technology Co.
VERB,
+69.65% ,
Genius Group Ltd.
GNS,
+45.37%
and other microcap companies have been recently complaining about might include activity that isn’t illegal.An investor looking to short a stock for which shares weren’t available to borrow, or for which the cost to borrow shares was too high, might enter into “swap transactions or sophisticated over-the-counter derivative transactions,” to bet against the stock,” he said.
This type of trader would be “pretty sophisticated,” Lamensdorf said. He added that brokers typically have account minimums ranging from $25 million to $50 million for investors making this type of trade. This would mean the trader was likely to be “a decent-sized family office or a fund, with decent liquidity,” he said.
Don’t miss: This dividend-stock ETF has a 12% yield and is beating the S&P 500 by a substantial amount
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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]
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Genius Group stock rallies more than 200% after it appoints former F.B.I. director to investigate alleged naked short selling
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The stock of a Singapore-based ed-tech and education company called Genius Group Ltd. rallied more than 200% on Thursday, after it said it appointed a former F.B.I. director to lead a task force investigating alleged illegal trading in its stock that it first disclosed in early January.
The stock was last up 264% to mark its biggest-ever one-day percentage gain. Volume of 197.76 million shares traded crushed the 65-day average of just 634,17. Genius Group
GNS,
+290.29%
also said it would issue a special dividend to shareholders to help expose the wrongdoing and is considering a dual listing that would make illegal naked short selling more difficult.The task force will be led by Timothy Murphy, a former deputy director of the F.B.I. who is also on the board. It will include Richard Berman, also a Genius Group Director and chair of the company’s Audit Committee, and Roger Hamilton, the chief executive officer of Genius Group.
“The company has been in communication with government regulatory authorities and is sharing information with these authorities to assist them,” the company said in a statement.
Genius Group said it has proof from Warshaw Burstein LLP and Christian Levine Law Group, with tracking from Share Intel, that certain individual 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.
It will now explore legal action and will hold an extraordinary general meeting in the coming weeks to get shareholder approval for its planned actions.
On the Genius website, Hamilton explains what the company, which went public in 2022, thinks happened.
Genius’ IPO priced at $6 a share in April of 2022, he wrote in a blog. The company, which aims to develop an entrepreneur education system, then completed five acquisitions of education companies to build out its portfolio and reported more than 60% growth in its last earnings report.
Analysts at Diamond Equity assigned it an $11.28 stock price target, while Zacks assigned it a $19.20 stock price target.
“By all measures, we believed we were doing all the right things to justify a rising share price,” said Hamilton.
The company then announced two funding rounds totaling $40 million to grow its balance sheet to more than $60 million, yet its stock fell to under 40 cents, or less than 25% of the cash raised and less than 20% of its net assets.
“This didn’t happen gradually,” the executive wrote. “It happened in two month intervals from our IPO, in June, August, October and December. Each time, over a period of a few days, massive selling volume that was a multiple of our float (As most of our shares are on lock up, only around 4 million are tradeable) was sold into the market, making our share price drop by 50% or more.”
The company has since drawn on Wes Christian, a short-selling litigator from Christian Levine Law Group, who has helped it understand how naked short selling works, and then Share Intel helped find the proof that that’s what has happened.
Individuals or groups get together and sell shares in a target company that they don’t own, with the aim of getting the share price to fall 50% in a short period. They use small-cap firms that have low buying volume, allowing them to scare off buyers.
“The broker doesn’t bother to find shares to borrow,” said Hamilton. “They simply sell shares they don’t have and after a few days book them as FTDs (failure to deliver) or hide them as long sales instead of short sales. The people who bought the shares have no idea they bought a fake share, and suddenly there’s plenty more shares in the market than there should be.”
If these groups sell 6 million shares from $12 to $6 each, and then buy back over two months at under $6, they double their money. That allows them to make up to $30 million out of thin air. They can then repeat the whole process a few months later.
“If they don’t buy back all the shares, they simply leave them as FTDs or hide them in offshore accounts,” he wrote. “At no point do they need to put up any cash to make this happen, as they’re making money from the moment they start selling fake shares.”
The ultimate goal is to push a company into bankruptcy, where the equity will be wiped out, meaning they never have to cover the short position on the fake shares.
By issuing a special dividend, Genius is hoping to find who is responsible, as all brokers are forced to disclose to the Depository Trust & Clearing Corp. (DTCC) how many shares their clients hold and how many dividends will be paid. Theoretically, that should expose the oversold shares and dishonest brokers will be forced to cover their position, said Hamilton.
In practice, dishonest brokers will not declare the fake shares and just pay the dividend out of their own pockets.
“If you issue a dividend that isn’t straight cash—such as a spinoff of a company so you are issuing shares, or a blockchain based asset, then the brokers can’t do that are a forced to either cover or be exposed,” he wrote.
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WSJ News Exclusive | Activist Investor Ryan Cohen Takes Stake in Alibaba and Pushes for More Stock Buybacks
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[ad_2]Cohen first contacted the Chinese e-commerce giant’s board in August to say he saw the company’s shares as undervalued
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Tesla stock wipes out three-day bounce, falls to lowest price in more than 2 years
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It has taken just one day for Tesla Inc.’s stock to erase the entire bounce it enjoyed over the last three days trading sessions of 2022, as disappointing deliveries data helped trigger the biggest selloff in more than two years.
The stock’s
TSLA,
-12.24%
Tuesday drop knocked the electric vehicle maker’s market capitalization to 15th on the list of most valuation S&P 500 index companies.On Tuesday, Tesla’s market cap fell below that of consumer products company Procter & Gamble Co.
PG,
+0.01% ,
with a current market cap of $359.18 billion, and was just below Nvidia Corp.
NVDA,
-2.05%
at $352.15 billion, according to FactSet data. Tesla sat just above Chevron Corp.
CVX,
-3.06% ,
which was at $336.43 billion. (See list of S&P 500’s 20 most valuable companies as of Tuesday’s closing prices below.)Tesla’s stock took a $15.08, or 12.2% dive, to $108.10 on Tuesday, to lead the S&P 500’s
SPX,
-0.40%
decliners, after the company reported over the weekend that fourth-quarter deliveries that came up short of expectations for the third quarter in a row. It suffered the biggest one-day decline since it plummeted 21.1% on Sept. 8, 2020, and closed at the lowest price since Aug. 13, 2020.With about 3.16 billion shares outstanding as of Oct. 18, the stock’s decline shaved about $47.62 billion off Tesla’s market cap, to bring it down to $341.35 billion. That’s a far cry from the peak market cap of $1.24 trillion reached exactly one-year ago.
After the stock hit the deepest oversold reading in its history based on the widely followed Relative Strength Index momentum indicator on Dec. 27, following the longest losing streak in more than four years, it ran up $14.08, or 12.9%, over the past three days.
If there’s a bright side to Tuesday’s stock selloff, it’s that even though the price fell below the Dec. 27 closing price, the RSI ended the day at 24.86, which is up from the Dec. 27 record low of 16.56.
That could be a preliminary sign of what chart watchers call “bullish technical divergence,” which is when prices make lower lows while the RSI makes a higher low. It’s still rather early to make that determination, however, as the stock needs to start bouncing again to see if RSI bottoms above the previous low.
Market caps of the Top 20 most valuable S&P 500 companies:
-
Apple Inc.
AAPL,
-3.74%
: $1.99 trillion. -
Microsoft Corp.
MSFT,
-0.10%
: $1.79 trillion. -
Alphabet Inc.
GOOGL,
+1.01%
GOOG,
+1.09%
: $1.16 trillion. -
Amazon.com Inc.
AMZN,
+2.17%
: $875.51 billion. -
Berkshire Hathaway Inc.
BRK.B,
+0.33%
BRK.A,
+0.17%
: $683.72 billion. -
UnitedHealth Group Inc.
UNH,
-2.18%
: $484.59 billion. -
Johnson & Johnson
JNJ,
+0.87%
: $465.88 billion. -
Exxon Mobil Corp.
XOM,
-3.44%
: $438.64 billion. -
Visa Inc.
V,
-0.18%
: $427.57 billion. -
JPMorgan Chase & Co.
JPM,
+0.76%
: $396.34 billion. -
Walmart Inc.
WMT,
+1.28%
: $387.26 billion. -
Eli Lilly and Co.
LLY,
-0.23%
: $360.29 billion. - Procter & Gamble Co.: $359.18 billion.
- Nvidia Corp.: $352.15 billion.
- Tesla Inc.: $341.35 billion.
- Chevron Corp: $336.43 billion.
-
Mastercard Inc.
MA,
-0.27%
: $333.43 billion. -
Meta Platforms Inc.
META,
+3.66%
: $331.58 billion. -
Home Depot Inc.
HD,
+0.02%
: $321.97 billion. -
Pfizer Inc.
PFE,
+0.04%
: $287.74 billion.
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Apple Inc.
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Tesla stock suffers worst week since 2020 as Elon Musk sells, large shareholder asks for new CEO
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Tesla Inc. shares Friday wrapped up their worst week since 2020, as Chief Executive Elon Musk sold billions in stock and faced a call from a prominent investor to step down from the helm of the electric-vehicle maker.
Tesla
TSLA,
-4.72%
stock fell 4.7% Friday for a weekly decline of 16.1%, the fourth-worst week in history for the shares after a series of three weeks in late February and early March 2020, when investors sold stocks in fear of the COVID-19 pandemic’s effects. Tesla ended the week with a market capitalization of less than $500 billion for the first time since November 2020, and the share price nearly fell lower than $150 for the first time since that month, ending the week at $150.05.In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023
The decline occurred as Musk sold stock, which he has done repeatedly since November of 2021. Musk disclosed the sale of more than $3.5 billion in Tesla stock late Wednesday, after performing the trades over the three previous trading sessions, when the price declined a cumulative 12.4%. In total, the Tesla CEO has sold $39.3 billion worth of Tesla stock in the past 13 months, according to calculations from Dow Jones Market Data and MarketWatch.
The recent sales have seemed tied to Musk’s acquisition of the social-media platform Twitter, which he bought for roughly $44 billion this year. It is the second time he has sold stock since closing that deal in October.
See also: Elon Musk’s $5.7 billion mystery gift has been revealed
Musk has reportedly been spending much of his time at Twitter, which seems to have angered some prominent Tesla investors. Leo KoGuan, Tesla’s third-largest individual shareholder, publicly called for a new CEO on Twitter this week, as a chorus of previously boosterish accounts on the service expressed dismay at the stock decline and Musk’s actions.
Bullish analysts have also expressed concerns about Musk’s focus and stock sales. Wedbush analyst Daniel Ives, who has an outperform rating and $250 12-month price target on Tesla shares, wrote Thursday that “Musk continues to throw gasoline in the burning fire around the Tesla story by selling more stock and creating Tesla brand deterioration through his actions on Twitter.”
“The nightmare of Musk owning Twitter has been an episode out of the Twilight Zone that never ends and keeps getting worse,” Ives wrote. “In late April Musk said he was done selling Tesla stock, instead the exact opposite has happened and put massive pressure on Tesla shares which have significantly underperformed the market since Musk took over Twitter in late October.”
Opinion: Why Tesla investors are the biggest losers in Elon Musk’s Twitter deal
Tesla shares have now declined 57.4% so far in 2022, as the S&P 500 index
SPX,
-1.11%
has declined 18.3%. Tesla’s market cap was $474.4 billion as of Friday’s close.[ad_2]
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Tesla’s ‘Twitter nightmare’ to continue, analyst says
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Tesla Inc. stock edged higher Thursday, but Wedbush analyst Dan Ives minced no words to decry what he called an ongoing Twitter Inc. “funding nightmare,” accusing Chief Executive Elon Musk to treat the electric-vehicle maker as an ATM machine.
“The nightmare of Musk owning Twitter has been an episode out of the Twilight Zone that never ends and keeps getting worse,” said Ives, a noted Tesla bull, in a note Thursday.
Musk…
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Elon Musk just sold $3.6 billion more in Tesla stock as Twitter turmoil continues
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Tesla Inc. Chief Executive Elon Musk just sold nearly $3.6 billion more of the company’s stock, according to a filing with the Securities and Exchange Commission released late Wednesday.
Musk sold just under 22 million shares worth $3.58 billion in aggregate from Dec. 12 to Dec. 14, the latest filing shows. Tesla shares TSLA fell in all three of those trading sessions, dropping 12.4% in total over the three-day stretch to finish Wednesday at $156.80.
This…
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Novozymes and Chr. Hansen agree deal to merge
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Danish biotechnology companies Novozymes AS
NZYM.B,
-10.74%
and Chr. Hansen Holding AS
CHR,
+25.98%
said Monday they have agreed to merge, creating a biological solutions provider with combined annual revenue of around 3.5 billion euros ($3.69 billion).The companies, which produce products such as enzymes, probiotics and biopharmaceutical ingredients, said the combination between two strategically complementary businesses will drive efficiencies while unlocking potential within biosolutions and providing additional growth opportunities.
“Novozymes and Chr. Hansen share the strong conviction that our combined scale, know-how, commercial strengths, and innovation excellence will drive value for our shareholders, customers and society at large,” said Novozymes Chief Executive Ester Baiget.
The deal will see Chr. Hansen shareholders receive 1.5326 new B-shares in Novozymes for each Chr. Hansen share, reflecting an implied premium of 49% to Chr. Hansen’s closing share price on Friday and valuing each Chr. Hansen share at 660.55 Danish kroner ($93.53) a share.
Novo Holdings AS, the largest shareholder in both Novozymes and Chr. Hansen, will support the proposed merger and exchange its 22% stake in Chr. Hansen at an exchange ratio of 1.0227 new B-shares in Novozymes.
The companies said they see annual revenue synergies of EUR200 million within four years after completion of the deal.
Write to Dominic Chopping at dominic.chopping@wsj.com
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WSJ News Exclusive | Amgen in Advanced Talks to Buy Horizon Therapeutics
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[ad_2]U.S. biotechnology company was the last of three suitors standing in an auction for Horizon
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FTC sues to block Microsoft’s $69 billion acquisition of game giant Activision Blizzard
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The Federal Trade Commission on Thursday sued Microsoft Corp. to block its $69 billion deal to buy Activision Blizzard Inc.
The acquisition, which would be Microsoft’s
MSFT,
+1.07%
largest and the biggest ever in the video gaming industry, would “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business,” the FTC claimed.“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a statement. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
FTC members pointed to Microsoft’s record of “acquiring and using valuable gaming content to suppress competition from rival consoles,” including its acquisition of ZeniMax, parent company of Bethesda Softworks.
Microsoft President Brad Smith indicated the software giant will fight the lawsuit. In a statement, he said Microsoft has “been committed since Day One to addressing competition concerns.”
“While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court,” Smith said.
Activision CEO Bobby Kotick, in a statement, said the suit “sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.”
Still, In recent weeks Microsoft has taken steps to demonstrate to regulators its acquisition of Activision would not give it an unfair advantage in the gaming market. On Tuesday, Microsoft said it would bring the “Call of Duty” franchise to Nintendo Co.’s
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Switch, a rival of Microsoft Xbox, and Microsoft has said it would make Call of Duty available on rival Sony Group Corp.’s
SONY,
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PlayStation.“It’s a bad idea,” Geoffrey Manne, president of the International Center for Law and Economics, said of the FTC’s lawsuit vs. Microsoft. “There may be markets in which some activities of some of these large tech companies cause concerns, but when they are expanding into new markets or enhancing competition in markets where they aren’t leaders, we should be encouraging them, not threatening them with lawsuits.”
The government’s action in administrative court marks the first serious regulatory threat to Microsoft’s business in more than two decades, when the Justice Department brought a landmark antitrust lawsuit against the software giant that took years and was settled in 2002. Since then, Microsoft had sidestepped antitrust scrutiny and Smith in particular has focused the glare on its tech rivals Amazon.com Inc.
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Apple Inc.
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+1.19% ,
Alphabet Inc.’s
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-0.94%
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-0.89%
Google, and Facebook parent company Meta Platforms Inc.
META,
+1.26% .Read more: Microsoft’s shadowy presence in antitrust push is angering the rest of Big Tech
Shares of Microsoft are up 1% in trading Thursday. Activision’s
ATVI,
-1.33%
stock is down 1.5%.The FTC’s lawsuit comes the same day it is heading to court in San Jose, Calif., in what is expected to be a three-week trial to bloc Meta’s $300 million acquisition of VR fitness app maker Within.
The trial is likely to showcase an intriguing look at the agency’s ability to stifle alleged anticompetitive conduct using largely untested legal theories at a time when Congress is sitting on tech antitrust legislation.
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Microsoft to bring ‘Call of Duty’ to Nintendo if Activision merger approved
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Microsoft Corp. said late Tuesday it has made a “10-year commitment” to bring the massively popular “Call of Duty” videogame series to Nintendo Co. consoles, when — and if — its merger with Activision Blizzard Inc. is completed.
In a tweet late Tuesday night, Xbox head Phil Spencer announced the deal. “Microsoft is committed to helping bring more games to more people – however they choose to play,” he said, adding: “I’m also pleased to confirm that Microsoft has committed to continue to offer Call of Duty on @Steam simultaneously to Xbox after we have closed the merger with Activision Blizzard King.”
Microsoft is awaiting federal approval of its $68.7 billion acquisition of Activision.
A deal to share one of Activision’s
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-0.29%
most lucrative videogame titles could appease some antitrust concerns from regulators. Spencer told Bloomberg News that a similar offer had been extended to rival Sony Corp.
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for its PlayStation consoles, but said that offer had so far been rebuffed.A “Call of Duty” title has not been available on Nintendo since 2013.
In an interview with the Washington Post published Tuesday, Spencer said there was no Nintendo “Call of Duty” release date set yet, but that if the merger closes — it has a June 2023 target date — future “Call of Duty” games would be released for all platforms at once. “Once we get into the rhythm of this, our plan would be that when [a Call of Duty game] launches on PlayStation, Xbox, and PC, that it would also be available on Nintendo at the same time,” he told the Post.
Nintendo shares
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+0.33%
rose slightly in Tokyo trading following the news. Microsoft shares
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-2.03%
fell Monday, and are down 17% year to date, compared to the S&P 500’s
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-1.44%
17% decline this year.[ad_2]
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BuzzFeed cuts 12% of staff citing worsening econ conditions
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NEW YORK — Digital media company BuzzFeed is cutting 12% of its workforce, citing worsening economic conditions.
The New York company, which made the announcement in a regulatory filing on Tuesday, did not disclose how many workers it was letting go. According to the data firm FactSet, BuzzFeed has 1,522 employees, which would mean roughly 180 of them would be laid off.
Advertisers, on which BuzzFeed relies, have broadly pulled back spending to address rising costs. Spending on advertising is typically among the most elastic items in a company’s budget and is often the first place to see cuts.
“In order for BuzzFeed to weather an economic downturn that I believe will extend well into 2023, we must adapt, invest in our strategy to serve our audience best, and readjust our cost structure,” Jonah Peretti, co-founder and CEO, wrote in a letter to staff.
Social media and other companies who rely on digital advertising have also recently announced layoffs, including Facebook parent Meta, Twitter, Snap and Gannett.
In addition to economic conditions BuzzFeed on Tuesday cited redundancies in its workforce related to the integration of Complex Networks, a youth entertainment company, which it acquired last year from Verizon and Hearst for $300 million.
The job cuts are expected to be completed by the end of the first quarter of 2023, BuzzFeed said, and expects charges related to the job cuts of between $8 million and $12 million. Those would be booked in the fourth quarter of this year.
Shares of BuzzFeed fell more than 4% in midday trading, to $1.09 each. They traded close to $10 less than two years ago, when the company went public via a merger with a special purpose acquisition company (SPAC).
BuzzFeed, founded by Peretti in 2006 and initially known for listicles and online quizzes, has established itself as a serious contender in the news business, winning a Pulitzer last year for international reporting. Its other brands include Tasty, the world’s largest social food network.
It has been buying up competitors, including HuffPost, the media outlet founded in 2005 as The Huffington Post, from Verizon Media in 2020.
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ChargePoint Results Fall Short. Guidance Is Saving the Stock.
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Shares of EV charging company
ChargePoint
have been caught in the sell off that’s hammered small-capitalization stocks that don’t produce earnings or generate free cash flow, yet. Investors hoped that third-quarter earnings could turn sentiment around, but some concerns linger.
ChargePoint
(ticker: CHPT), on Thursday afternoon, reported a per-share loss of 25 cents from $125 million in sales. Wall Street was looking for a loss of 20 cents per share on sales of $132.3 million.[ad_2]
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Lordstown Motors shipping out first batch of electric trucks
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LORDSTOWN, Ohio — Commercial electric vehicle startup Lordstown Motors has received approval to ship the first batch of its first model, the Endurance pickup.
The company announced Tuesday that the first units of the initial batch of 500 trucks were leaving the plant after they passed safety tests and hit several key benchmarks needed to be sold. It did not state how many of the pickups have been made.
The trucks were built in an old General Motors small-car assembly plant in Lordstown, Ohio, near Cleveland, that was purchased last year by Taiwan’s Foxconn Technology Group, the world’s largest electronics maker.
“I am very proud of the Lordstown Motors and Foxconn EV Ohio team for their hard work, grit and tenacity in achieving this milestone,” said Edward Hightower, the company’s president and CEO. Production of the vehicles remains slow, though, but the company reiterated that “volume will accelerate as we resolve supply-chain constraints.”
Earlier this year, Lordstown said it expected to produce 3,000 of its flagship Endurance electric trucks before the end of 2023.
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CrowdStrike stock drops nearly 20% as elongating sales cycle slows new subscriptions
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CrowdStrike Holdings Inc. shares dropped in the extended session Tuesday after the cybersecurity company said new subscriptions came in below expectations amid macro headwinds and longer customer buying cycles.
Given concern that businesses are cutting back on spending, CrowdStrike
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shares plummeted nearly 20% after hours, following a 1% decline in the regular session to close at $138.George Kurtz, CrowdStrike’s co-founder and chief executive, told analysts on a conference call that the company reported $198.1 million in net new annual recurring revenue, or ARR, in the quarter, not as much as it had hoped.
ARR is a software-as-a-service metric that shows how much revenue the company can expect based on subscriptions. That grew 54% to $2.34 billion from the year-ago quarter, while the Street expected $2.35 billion. Kurtz said that about $10 million was deferred to future quarters.
“We expect these macro headwinds to persist through Q4,” Kurtz told analysts.
Burt Podbere, CrowdStrike’s chief financial officer, explained that the company relies on ARR because it’s “an X-ray into the contract sales.”
“As George mentioned, even though we entered Q2 with a record pipeline, and we are expecting the elongated sales cycles due to macro concerns to continue, we’re not expecting to see the typical Q4 budget flush given the increased scrutiny on budgets.”
Podbere said it is “prudent to assume” fourth-quarter net new ARR will be up to 10% below the third quarter’s. That would mean about a 10% year-over-year headwind going into the first half of next year, and “full-year net new ARR would be roughly flat to modestly up year over year.”
“This would imply a low 30s ending ARR growth rate and a subscription revenue growth rate in the low to mid-30s for FY 2024,” Podbere said.
Read: Cloud software is suffering a cold November rain. Can Snowflake and Salesforce turn things around?
The company expects adjusted fiscal fourth-quarter earnings of 42 cents to 45 cents a share on revenue of $619.1 million to $628.2 million, while analysts surveyed by FactSet forecast earnings of 34 cents a share on revenue of $633.9 million, according to analysts.
CrowdStrike expects full-year earnings of $1.49 to $1.52 a share on revenue of $2.22 billion to $2.23 billion. Wall Street expects $1.33 a share on revenue of $2.23 billion.
The company reported a fiscal third-quarter loss of $55 million, or 24 cents a share, compared with a loss of $50.5 million, or 22 cents a share, in the year-ago period. Adjusted net income, which excludes stock-based compensation and other items, was 40 cents a share, compared with 17 cents a share in the year-ago period.
Revenue rose to $580.9 million from $380.1 million in the year-ago quarter.
Analysts expected CrowdStrike to report earnings of 28 cents a share on revenue of $516 million, based on the company’s outlook of 30 cents to 32 cents a share on revenue of $569.1 million to $575.9 million.
So far in November, cloud software stocks have been getting trashed. While the S&P 500
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-0.16%
has gained 2%, and the tech-heavy Nasdaq Composite
COMP,
-0.59%
is flat, the iShares Expanded Tech-Software Sector ETF
IGV,
-0.78%
has fallen more than 2%, the Global X Cloud Computing ETF
CLOU,
-1.12%
has declined more than 4%, the First Trust Cloud Computing ETF
SKYY,
-0.74%
has fallen more than 6%, and the WisdomTree Cloud Computing Fund
WCLD,
-1.05%
has dropped more than 11%.[ad_2]
