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.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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