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.
BULLS BEAT BEARS
The comeback rally continues! U.S. markets ended the week on another high note, with the S&P gaining 0.84 percent. Stocks bounced back on Friday after a Thursday sell-off on concerns that the economic recovery may be losing some of its steam. The Delta variant’s surge across unvaccinated pockets of America, coupled with the announcement that Japan will be under a state of emergency for the Olympics, had “reopening” plays like airlines and hotels leading a broad decline before they recovered to end the week. Stocks were in the green largely across the board, even Big Tech, despite President Biden signing an executive order meant to foster competition in sectors dominated by a handful of big players.
NEW ERA FOR AMAZON
Amazon was among the stocks somewhat dinged by the president’s executive order. Still, the company hit an all-time high during the first week of the Andy Jassy era. Jassy, a longtime Amazon exec who had been running its cloud behemoth, officially took the CEO reins from Jeff Bezos on Monday. (Bezos is sticking around as executive chairman of the company he founded 27 years ago, but will focus more of his attention on his Blue Origin space venture, which is scheduled to send him to suborbital space later this month). Jassy got an early office-warming gift when Amazon shares spiked after the Pentagon announced it was scrapping its $10 billion cloud-computing contract known as JEDI. That contract had been awarded to Microsoft during the Trump administration, leading Amazon to sue claiming that Trump had improperly interfered with the deal because of his personal animus toward Bezos. The Department of Defense made the call to kill the contract rather than wait for the litigation to wind its way through the courts. Instead, the government will solicit bids from both Amazon and Microsoft — as well as any other cloud providers that can "meet the DoD’s requirements" on future projects.
HOW PFIZER IS PFARING
Shares of Pfizer ended the week on a high note after the pharma company and its partner, BioNTech, said it was developing a COVID-19 booster shot that targets the Delta variant. If approved — and if necessary — the booster would be offered to people within 12 months of their initial doses. The two-shot regimen of their current vaccine still offers the “highest levels” of protection against all known COVID variants, according to Pfizer. The stock previously tumbled after Israel’s health ministry shared data that showed the vaccine’s efficacy fell to 64 percent against Delta, though it still prevented the worst outcomes of the virus. Medical experts cautioned that the results were a single data point that warranted more study, and that the efficacy of the approved vaccines is going to be a moving target as new strains of the coronavirus continue to mutate around the world.
DIDI CRASHES
The “Uber of China” is having a rough start to its American market debut. A week after Didi Global debuted on the NYSE, shares slid nearly 6 percent amid growing concerns over a regulatory crackdown in its home country. The stock is down about 20 percent since the IPO. Beijing regulators put the ride-hailing company under a cybersecurity review that means blocking new downloads of the app in China, where it has some 375 million active users. Those users can still access the service, but the fact that China’s government would take such drastic action against one of its most successful companies suggests that Didi could be the canary in the coal mine for future Chinese IPOs that want to list on U.S. exchanges — if they’re even allowed to go public here at all. Democratic Sen. Bob Casey and Republican Sen. Marco Rubio are sponsoring a bipartisan bill that would bar Chinese IPOs from U.S. markets unless they comply with strict audit rules.
NEXTDOOR SPAC
Nextdoor, the social media platform for neighborhoods, is the latest to find its way to the public markets via a SPAC merger. The deal with Khosla Ventures will value the company at about $4.3 billion. Nextdoor CEO Sarah Friar told Cheddar that the reverse merger will allow the platform — already used by nearly 1 of 3 American households according to the company — to expand both domestically and overseas. The upshot with Nextdoor, Friar said, is that it creates strong network effects at the local level online, and then those connections are realized offline, too. That’s a local advertiser’s dream, especially given that Nextdoor is willing to “make trade-offs on engagement” in order to foster an online community that “stays respectful,” according to Friar. To that end, Nextdoor plans to trade under the ticker ‘KIND’ when the SPAC is expected to close later this year.
