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.
MARKETS SEE-SAW
U.S. markets ended the week on Friday mostly higher after a wobbly start, waffling over a mixed bag of earnings and, above all else, the continued "will-they-or-won't-they" prospect of a new stimulus deal being reached before Election Day. On the earnings front, investors punished Intel after the chipmaker reported weaker-than-expected numbers for its increasingly critical data-center unit. Netflix took a beating, too, after missing on subscriber growth. American Airlines and Southwest both reported huge quarterly losses even as they've gotten better at cutting their burn rates. Meanwhile, Snap surprised just about everyone with a major revenue beat. The mixed bag of earnings came as weekly jobless claims dropped to nearly their lowest level since the start of the pandemic: 787,000 more Americans joined the ranks of the unemployed, down from a revised 842,000 the week prior, but nonetheless a historic number going into a presidential election.
UNITED STATES V. BIG TECH
The federal government filed its long-expected lawsuit against Google, accusing the behemoth of antitrust violations related to its dominance in search. This is the most significant action taken against a tech giant by the federal government since President Clinton's Justice Department took on Microsoft in the 1990s. The government is arguing that Google is protecting its advantage in search by striking deals with Apple and others to make Google the default search engine on iPhones and other devices. Google is arguing that there are plenty of choices for consumers on the internet "just a click away." (Google parent Alphabet also reported earnings this week, showing its first-ever year-over-year quarterly decline, stung by a soft digital ad market.) The DOJ's suit, which is relatively narrow in its argument, is effectively the warning shot from the government to Big Tech. The filing came as Senate Republicans voted to subpoena the CEOs of Facebook and Twitter over an entirely separate matter related to what they called censorship of conservative thought on those platforms. But taken together, the moves show a government that is increasingly willing to litigate, legislate, and regulate the tech firms that dominate our lives.
R.I.P. QUIBI: 2020-2020
The Quibi experiment is over. The short-form streaming service that wanted to change how we consume video on mobile is shutting down after failing to catch on, six months after it launched. Co-founder and media mogul Jeffrey Katzenberg said he and his partner, Meg Whitman, made a "clear-eyed decision" to cut their losses. Writing in a blog post to announce the closure, Whitman and Katzenberg said: "Our failure was not for lack of trying; we've considered and exhausted every option available to us." The startup had raised $1.75 billion in funding, making it one of the most high-profile media failures in years. Quibi will cease its service "on or around" Dec. 1.
CAN AN ELECTRIC HUMMER TAKE ON TESLA?
Tesla has some new competition in the market for high-end electric cars. General Motors debuted the new all-electric Hummer in a commercial during the World Series, officially entering a market that has been dominated by Elon Musk and Tesla. GM is marketing the GMC Hummer EV as an electric "supertruck" that will be available in a year, just before Musk's Cybertruck. Starting price: $80,000, or just about double what Tesla says the Cybertruck will cost. Tesla, meanwhile, reported its fifth-consecutive quarterly profit, driving the stock higher and adding to the chatter on Wall Street that the company could soon be added to the S&P 500.
UBER, LYFT FIGHT FOR SURVIVAL IN CA
A California appeals court dealt another blow to Uber and Lyft, affirming a lower court ruling that the ride-hailing companies must classify their drivers as employees, rather than independent contractors. The decision could be rendered either moot or the law of the land after Election Day, when California voters will decide a ballot referendum that seeks to grant Uber, Lyft, and other "gig economy" services exemptions from the law. Prop 22 is already the most expensive ballot measure in California's history: Uber, Lyft, DoorDash, Instacart, and others have plowed close to $200 million into passing the measure. Despite that, a poll last month by UC-Berkeley found that just 39 percent of likely voters supported giving the gig companies a carve-out to the law, while 36 percent opposed it. The fate of Prop 22 could determine whether Uber and others continue to operate in the state.
