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.
JOBS BLOWOUT
U.S. markets ended the week on a down note, pausing after a four-day rally that sent stocks to record highs. A surprisingly strong January employment report showed 225,000 jobs added for the first month of the year although the unemployment rate ticked up slightly to 3.6 percent. The better-than-expected showing presaged an ADP report showing private payrolls shot up, due in part to unseasonably warm weather around the country. The worsening impact of the coronavirus did little to shake investor confidence this week as they focused instead on another round of strong corporate earnings and a growing sense that the economy will remain on solid footing going into the election.
UBER EARNINGS
Uber had its best day as a public company Friday, a day after it beat earnings expectations and said it would be profitable by Q4 of this year. That's a full year earlier than the company had originally targeted, and is the reason why the stock soared to close out the week. The rest of the numbers were resilient, too. Gross bookings were up 28 percent year-over-year and, perhaps more importantly, Uber ($UBER) is now losing less money than it was. The company showed an adjusted loss of $613 million for the quarter (compared to $817 million in its previous fourth quarter). The rising tide lifted all boats (cars?), with shares of Lyft popping 4 percent on the hopes that the notoriously money-losing endeavor that is the ride-hail industry may, one day, prove profitable.
GOOGLE EARNINGS
Google parent Alphabet also reported earnings, though the results were decidedly more mixed. The company beat on profit but missed on revenue, but the real news was the disclosure, for the first time, of the YouTube and cloud businesses. YouTube brought in $15 billion for Alphabet ($GOOGL)in 2019, about the equivalent of the NFL's total revenues. Meanwhile, Google's cloud platform made $2.6 billion for the quarter, for an annual run-rate of about $10.4 billion. Impressive, but still small potatoes compared to Amazon Web Service's run rate of about $40 billion.
TESLA'S WILD RIDE
What a week for Tesla. The stock had some of its biggest swings in history, popping 20 percent on Monday and then dropping 17 percent on Wednesday to snap a six-day surge. At its peak on Tuesday, Tesla ($TSLA) had a larger market cap than McDonald's, Citigroup or the rest of the American auto industry. So what happened? Not a whole lot. The company has been helped by some positive developments, including the successful launch of its Chinese gigafactory (though it's had to temporarily close stores in China over the coronavirus outbreak) as well as a better-than-expected Q4. But the pop was mainly the result of a short squeeze, as short sellers cut their losses and cashed out. Then investors took profits as the stock approached $1,000, sending the price back down to earth ー somewhat.
CASPER IPO
The reception that Casper's IPO got from Wall St.: cooler than the other side of the pillow. The mattress startup became the latest in a series of unprofitable but trendy DTC consumer brands to go public in a market that has become weary of money-losing businesses (thanks, WeWork). Casper ($CSPR) opened at $14.50 after pricing the offering in the $12 to $13 per share range, lower than the original range of $17 to $19. Shares ended the first day at $13.50, giving the company a valuation of around $500 million. Last year, Casper was privately valued at over $1 billion. High acquisition and marketing costs combined with the stubborn fact that most people only buy mattresses ever so often, along with a seriously crowded marketplace, is giving investors pause about Casper's long-term profitability.
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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