From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
MARKET SHRUGS OFF INFLATION
Stocks rebounded from an early slump to close out the week, boosted by reopening optimism following the CDC’s sharp reversal on mask wearing for vaccinated Americans. Tech shares led the rebound, though the Nasdaq still closed the week lower by 1.04 percent. The Dow and S&P also ended with modest losses. The big economic data of the week was April's CPI, which came in much hotter than expected, leading to renewed concerns that the economic recovery is in danger of overheating. The consumer price index — a measure of a basket of goods, housing, and energy costs — jumped 4.2 percent year-over-year, a much higher than expected reading that comes during a time of shortages and price hikes on everything from grocery staples to computer chips. Inflation is accelerating at its fastest pace in 12 years as the American economic engine grinds into gear, though the data is a bit distorted because of how abnormally low it was this time last year at the height of the pandemic. The Fed has said it expects the rise in inflation to be temporary.
MUSK REVERSES COURSE
Fresh off his hosting stint on SNL, Elon Musk did an about-face on Bitcoin, tweeting that Tesla would stop accepting the cryptocurrency for purchases due to its environmental impact. The decision came just three months after he announced the digital coin as a new way to pay. Bitcoin had its worst week since February on that tweet, dropping as much as 15 percent before paring some of those losses. Other coins like Ether and Doge also slid, though Doge’s price went as high as 56 cents after Coinbase said it would initiate support for the token in the coming weeks. Tesla had a miserable week of its own, dinged by the impact of inflation on high-multiple stocks, Musk’s Bitcoin reversal, and surprisingly bad sales data out of China. While Tesla doesn’t break out monthly or regional sales, the China Passenger Car Association estimated that the company sold 27 percent fewer domestically-made vehicles in April than March, while Warren Buffett-backed BYD has been gaining steam.
AIRBNB HITS THE SKIDS
Airbnb reported its second earnings since going public, showing revenue grew 5 percent in Q1 to $887 million. The home-rental platform’s net loss widened to $1.2 billion. For comparison, competitors like Expedia and Booking Holdings reported double-digit revenue declines given the uneven state of global travel. Shares of Airbnb are down 40 percent from their highs in February, hurt by increased competition not just from more traditional booking platforms but also the likes of VRBO, which is particularly well positioned to take share from Airbnb when it comes to rural vacation rentals and has a more attractive fee structure for consumers.
NEW ERA FOR VICTORIA’S SECRET
L Brands has decided to spin off Victoria’s Secret and Bath & Body Works into two separate public companies after spending the last year deciding what to do with its two flagship properties, particularly its struggling lingerie chain. Victoria’s Secret was in the process of being acquired by Sycamore Partners in early 2020 before the pandemic sank the deal. Since then, the company got a new CEO and embarked on a turnaround that involved closing underperforming stores and deemphasizing its famously sexualized image for a more inclusive brand. So far, it seems to be working. VS sales reached $1.6 billion in Q1, compared to $894 million a year prior at the nadir of its troubles. Victoria’s Secret is expected to be valued between $5 billion and $7 billion after the spinoff to L Brands shareholders, according to the New York Times. As for Bath & Body Works, the chain famous for its home fragrance selection, saw net sales rise to $1.5 billion in Q1, up 60 percent in two years.
DISNEY MOMENTUM SLOWS
Disney shares took a drubbing after reporting an all-around disappointing quarter, ending the week down 6.49 percent. Disney+, the pandemic bright spot for the Mouse House, saw subscriber growth slow to 8.7 million for the quarter. That still brings Disney+ subs to 104 million in the year-and-a-half since it launched, not too shabby considering the company’s own original forecast was for 60 to 90 million subs by 2024. Still, for the Street, it’s all about momentum and it may be that Disney’s streaming growth just couldn’t sustain that pace forever.The theme park division reported its fourth straight loss — no surprise there, given many of those parks are just now opening back up.
Jason Moser, Senior Analyst at The Motley Fool, breaks down AMC's third quarter earnings and discusses the future of the theater chain despite low ticket sales.
IBM's spinoff, Kyndryl, is officially an independent public company. The $19 billion business is now listed on the NYSE under the ticker KD, becoming one of the largest players in the IT services market. David Wyshner, CFO of Kyndryl, joined Cheddar to discuss what this milestone means for the company moving forward.
Emma Searson, an author on the just-released Renewables on the Rise report and the director, 100% Renewable Campaign at Environment America, joined Cheddar to discuss the rapidly growing renewable energy sector. Between 2011 and 2020, the report shows that wind, solar, and geothermal energy production grew about 15 percent annually and that wind and solar alone account for 11 percent of electricity in the country. "There are a few really important drivers of the renewable energy progress that we're seeing all across the country," Searson said, highlighting falling prices, technology improvements, and supportive policies.
Wendy O, host of 'The O Show' joins Cheddar News to discuss the recent rally from cryptocurrency, Ether. She also discussed incoming New York City mayor Eric Adams wanting to teach kids crypto in schools.
Professional sports is facing a reckoning right now over several stories painting an ugly picture of a toxic work environment, encompassing multiple teams in multiple leagues and dealing with different issues.
This week, the NHL's Chicago Blackhawks ousted their general manager and senior director of hockey operations after an investigation confirmed former player Kyle Beach's claims that the team's former video coach Brad Aldrich sexual assaulted him back in 2010, with upper management ignoring his claims until after the team won the Stanley Cup that season. Last night, Joel Quenneville, now the coach of the Florida Panthers but Chicago's coach that season, stepped down from his post.
This comes just a few weeks after the NFL was rocked by leaked emails showing now-former Las Vegas Raiders Head Coach Jon Gruden using racist, sexist and homophobic language. He resigned soon after the emails came to light. We can't forget, though, that those emails come from a much broader investigation of the toxic work environment in the offices of the Washington Football Team. NFL Commissioner Roger Goodell said this week the league wouldn't publicly release anything from its investigation of the team, but lawyers for many of the women interviewed in the case say they want a public report.
And last January, just one month after hiring him, the New York Mets had to fire then-General manager Jared Porter, who admitted to sending explicit, unsolicited texts and images to a female reporter in 2016 when he worked for the Chicago Cubs. ESPN had been in possession of the texts since 2017, but the woman in question asked the network not to run the story out of fear her career would be harmed. She only reached back out to ESPN after she left the field of journalism altogether. Porter has been banned from the sport through next season.
If you believe in the phrase "where there's smoke, there's fire," professional sports is a five-alarm blaze.
Julie DiCaro, senior writer and editor at Deadspin, joins None of the Above to discuss.
Curaleaf CEO Joe Bayern joined Cheddar's "Closing Bell" to discuss the cannabis company's Q3 earnings report, which came in under expectations and included widening losses. Bayern discussed taking a hit on profitability based on the slower-than-expected expansion in some Northeast markets. While the company reduced its fiscal guidance for 2021 due to a general slowing of the cannabis market, he did note that he still sees much room for growth in 2022 and beyond.
Online consignment and thrift shop thredUP reported a Q3 earnings beat on Monday, and CEO James Reinhart joined Cheddar to discuss exceeding expectations and the state of the business overall. Reinhart said the company is thriving while other businesses may face supply chain issues due to the convenience of its system of acquiring secondhand clothing. "In a world where most consumers are feeling squeezed by prices and seeing apparel shortages, everything we have on thredUP is 100 percent in stock and ready to ship," he said. "And so I think it speaks to real opportunity for resale and a company like thredUP during the holiday season and into 2022."
Former NBA star, commentator, and entrepreneur Baron Davis and Deluxe Corporation Chief Brand Officer Amanda Brinkman, joined Cheddar to discuss Season 6 of the reality show "Small Business Revolution," premiering Tuesday. The season will focus on helping six Black-owned businesses in the Twin Cities, Minneapolis and St. Paul. Davis noted learning about the lack of resources, connections, and opportunities for Black business owners during the show. "There are so many things we need to do as a society to address racial injustice and inequity, however, one of the ways for it is economic empowerment," Brinkman added.
Katia Beauchamp, strategic advisor for FemTec Health and former Birchbox CEO, joined Cheddar to discuss the health and beauty sciences company's recent acquisition of subscription beauty supply provider Birchbox. She noted that FemTec wants to change the perception of the brand to include health as well as beauty. "This is something where we are reimagining how can we help consumers discover beauty products that really help them take great care of themselves, have beautiful underlying health that is shown on the exterior too," she added.
