In this April 22, 2021, photo shows a Tesla Supercharger station in Buford, Ga. Tesla reports earnings on Wednesday, Jan. 25, 2023. (AP Photo/Chris Carlson)
The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
BED BATH & BEYOND DEFAULTS
Bed Bath & Beyond is keeping investors on the edge of their seats. Roughly a week after admitting that bankruptcy was a real possibility, the long-struggling home goods retailer has defaulted on sizable lines of credit with JPMorgan and lender Sixth Street. Now the company is trying to figure out what's next. In an SEC filing, it said bankruptcy is one option. It's also seeking an acquisition and negotiating with landlords to lower its rent burden. "These measures may not be successful," the firm admitted. Shares of Bed Bath & Beyond shot up around 5 percent following the news but are down more than 20 percent for the week.
HIRING AND FIRING
There was another round of high-profile layoffs this week and not just from Big Tech. Spotify is cutting 6 percent of its global workforce and overhauling its corporate structure to make up for growing too fast earlier in the pandemic. IBM is cutting 3,900 employees or 1.5 percent of its workforce in anticipation of declining cash flow in 2023, and toy manufacturer Hasbro rounded out the week with plans to terminate 1,000 employees or about 15 percent of its workforce. On the upside, Chipotle announced plans to hire 15,000 workers ahead of "burrito season," the period between March and May that culminates in Cinco de Mayo. The Commerce Department also released the latest gross domestic product numbers, and the U.S. economy grew 2.9 percent in the fourth quarter of 2022, marking a deceleration but still a healthy level of growth.
ACTIVIST INVESTOR VS. SALESFORCE
Activist investors have piled into Salesforce, sparking speculation about the future of the software giant. Both Elliott Investment Management and Inclusive Capital bought large stakes in the company. Right now, the new investors are trying to put a positive spin on the development.
"We look forward to working constructively with Salesforce to realize the value befitting a company of its stature," tweeted Jesse Cohn, managing partner at Elliott. However, these kinds of relationships can often be contentious. In addition, the company is in a sensitive position. It cut about 10 percent of its workforce earlier this month after admitting to over hiring.
WINNERS AND LOSERS
Earnings season is well underway, so there were several companies that got either a boost or a ding this week based on the results. On Friday, shares of Intel sank after a report showing declining revenues, profits, and outlook projections. Microsoft shares, meanwhile, popped around 3 percent for a mix of reasons, with one being excitement around Buzzfeed's announcement that it plans to use artificial intelligence for content. Just last week, the software giant announced plans to cut staff and double down on its investments in AI. Shares of Tesla also shot up at the end of the week more than 10 percent as investors continued to process its strong earnings.
Wealthfront’s CFO Alan Iberman talks the $2.05B IPO and the major moment for robo banking as the company bets on AI, automation, and “self-driving money."
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
