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 MUTED ON IMPEACHMENT
It was a watershed week in American politics as the House officially opened an impeachment inquiry against President Trump over explosive whistleblower allegations that he used the office of the presidency to solicit foreign interference in the election. And yet, markets largely shrugged the whole thing off. Given the unlikelihood that the GOP-controlled Senate would ever vote to convict President Trump and remove him from office, investors seemed to believe the impeachment firestorm was much ado about nothing, at least in terms of the markets. What they remain focused on: the trade war. Stocks went up after the readout of the Ukraine phone call at the heart of the latest White House scandal came out, but was likely unrelated: President Trump had also just said that a China trade deal "could happen sooner than you think." The question now: why would China want to make a deal before the election, when they could wait it out and potentially deal with a different Oval Office occupant?
TALE OF TWO IPO MARKETS
The year started with dreams of an IPO bonzana dancing in the heads of investors. It hasn't exactly turned out that way. This week, Peloton became the latest unicorn startup to stumble in its Wall Street launch, losing 11 percent on its opening day. Then Endeavor, the huge sports and entertainment talent agency and media conglomerate, pulled the plug on its IPO on the eve of its planned debut, citing weak demand. And then there's WeWork, which has also postponed its public offering amid a cascade of management issues, investor concerns, and its own bankers telling it to wait. The We Company officially removed Adam Neumann from his role as CEO and is said to be working hard to make changes that could allow it go public later this year or early next. While the market for IPOs from large, consumer-tech companies ー Peloton, Uber, Lyft to name a few ー has cooled considerably, one sector continues to overperform: enterprise software. Datadog is the latest SaaS company to surge after its offering, currently up about 40 percent and following in the footsteps of other workplace-centered software companies like Slack, Zoom, and Ping Identity.
JUUL UNDER FIRE
Juul Labs' troubles intensified this week. The company ousted its CEO, Kevin Burns, and replaced him with a strategy executive from Altria, the cigarette giant that owns 35 percent of Juul. The shakeup came amid more reports of vaping-related illnesses and deaths ー the nationwide toll is currently 12. Friday, the CDC issues the starkest warning yet, warning people to stop using e-cig and vaping products. For Altria, the Juul investment has gone from looking like a savvy hedge to potentially one of the worst-timed in corporate history. Altria and Philip Morris International also called off talks on re-merging after pushback from investors, particularly PhilMo investors who wanted nothing to do with the regulatory environment surrounding vaping in the U.S.
CEO EXODUS
The Juul and WeWork CEOs weren't the only ones out of a job this week. EBay's chief executive, Devin Wenig, stepped down amid internal turmoil at the online marketplace. Wenig was promoted to CEO four years ago when eBay was spun off from PayPal, having come from Reuters. EBay shares have rebounded this year after a prolonged slump. Activist investor Elliot Management sent a letter to management back in March saying it was unhappy with "an inefficient organizational structure, wasteful spend and a misallocation of resources." With the C-suite revolving door spinning, Wells Fargo was able to find a leader after months of searching. The chief of Bank of New York Mellon, Charles Scharf, will become CEO and president of Wells Fargo, which had been plagued by scandal even before its former CEO, Tim Sloan, abruptly resigned in the spring.
NIKE DOMINATES
Nike shares hit an all-time high after a blockbuster earnings report showed the dominant apparel and shoemaker continues to fire on all cylinders. Nike cited progress in its digital transformation, high demand, and product innovation for sales growth that blew past expectations. Despite the trade war, Nike has been able to grow its revenues in China 27 percent to $1.7 billion. The earnings beat was a needed win for the apparel giant, which had suffered from two sub-par quarters in a row as it worked to realign its business with a direct-to-consumer strategy. Shares of Nike are now up 24 percent on the year.
