SEC charges Terra founder Do Kwon with fraud
The U.S. Securities and Exchange Commission has charged crypto developer Do Kwon and his company Terraform Labs with defrauding investors in what the regulator deemed a multibillion-dollar scheme, according to a filing in federal court in the Southern District of New York.
Kwon founded blockchain platform Terraform Labs and was the primary developer of two cryptocurrencies whose demise roiled crypto markets around the world last year. He raised billions of dollars from investors beginning in April 2018 by selling a series of inter-connected digital assets, many of which were unregistered securities, the SEC alleged.
TerraUSD, an algorithmic stablecoin supposed to maintain a 1:1 peg to the U.S. dollar, derived its value through another paired token called Luna.
Both tokens lost nearly all their value when TerraUSD, also known as UST, slipped below its 1:1 dollar peg in May 2022. Prior to its collapse on May 9, TerraUSD had a market cap of more than $18.5 billion and was the tenth-largest cryptocurrency.
Applied Materials forecasts strong Q2 as chipmakers scale up production
Chip tools maker Applied Materials Inc on Thursday forecast second-quarter revenue broadly above market estimates, as it benefits from higher production of semiconductors that had been in short supply for the most of last year.
After a global shortage of semiconductors affected everything from smartphones to car production, chipmakers are now scrambling to boost capacity in the United States and Europe and reduce reliance on Asian hubs.
This has helped Applied Material, which is also benefiting from rising popularity of electric vehicles and accelerating adoption of automation even as demand from consumer-driven electronics markets including PCs and smartphones remains weak.
Shares of the Santa Clara, California-based company rose nearly 2% in trading after the bell. The stock lost 38% last year.
The company forecast current-quarter revenue of $6.40 billion, plus or minus $400 million, compared with analysts’ average estimate of $6.29 billion, according to Refinitiv IBES data. The outlook includes impact from ongoing supply chain challenges.
Meanwhile, adjusted profit is expected to be between $1.66 and $2.02 per share.
Revenue for the first quarter was $6.74 billion, compared with analysts’ average expectation of $6.69 billion.
Excluding items, the company earned $2.03 per share, beating estimates of $1.93 per share, according to Refinitiv IBES data.
Posted by Reuters
Household debt jumps to $16.9T
U.S. household debt jumped to a record $16.90 trillion from October through December last year, the largest quarterly increase in 20 years, as mortgage and credit card balances surged amid high inflation and rising interest rates, a Federal Reserve report showed on Thursday.
Household debt, which rose by $394 billion last quarter, is now $2.75 trillion higher than just before the COVID-19 pandemic began while the increase in credit card balances last December from one year prior was the largest since records began in 1999, the New York Fed’s quarterly household debt report also said.
Mortgage debt increased by $254 billion to $11.92 trillion at the end of December, according to the report, while mortgage originations fell to $498 billion, representing a return to levels last seen in 2019.
Meanwhile credit card balances increased by $61 billion in the fourth quarter while auto loan balances rose by $28 billion, the report said.
Visa’s finance chief Vasant Prabhu to leave payments giant
Visa said on Thursday its chief financial officer, Vasant Prabhu, will leave the company on Sept. 30, after eight years as one of the top executives at the payments giant.
Prabhu, who joined the company in 2015, will assist the company with the search for and the onboarding of his replacement.
In November, the world’s largest payments processor had also named its president, Ryan McInerney, as its new chief executive officer to steer the company through a challenging period for the payments industry as consumers tighten their spending.
Sharply higher prices for everyday goods have squeezed consumers in recent months, clouding the outlook for payments companies for 2023.
In the backdrop of a tumultuous economy, revenue growth at Visa continued to wind back to pre-pandemic levels in the first-quarter as the post-lockdown travel craze ebbed and consumer spending slowed.
Prabhu will also step down from his role as the vice-chair of Visa.
DoorDash beats revenue estimates as consumer demand remains strong
DoorDash Inc topped Wall Street expectations for quarterly revenue on Thursday helped by steady demand for ordering food online, despite persistently high inflation and higher prices.
As fears of a recession grow in the United States, cost-conscious consumers have stuck with their pandemic habit of ordering affordable meals at home rather than dining at restaurants, boosting revenues for companies like DoorDash and UberEats parent Uber Technologies Inc.
Total orders rose 27% to 467 million in the fourth quarter from the prior year.
The top U.S. food delivery company expects gross order value – the total value of all app orders and subscription fees – to be between $60 billion to $63 billion for 2023, compared with $53.4 billion it reported in 2022.
The San Francisco-based firm’s revenue jumped 40% to $1.82 billion in the quarter ended Dec. 31. Analysts had expected about $1.77 billion, according to IBES data from Refinitiv.
However, the company’s quarterly net loss widened to $642 million, or $1.65 per share, from $155 million, or 45 cents a year earlier, due to costs related to stock-based compensation and staff cuts.
Stocks sink after second hot inflation report
All three of the major U.S. stock averages fell over 1% on Thursday after the producer price index (PPI) rose a more-than-expected 6% annually. This follows the 6.4% jump in consumer prices (CPI) earlier this week. Both reinforce that inflation remains red hot which could force the Federal Reserve to be more aggressive with rate hikes. The 10-year Treasury yield rose to 3.842% – the highest level since December. In commodities, oil was little changed at $78.49 per barrel.
Sweden emerges as sudden front-runner to host 2030 Olympics
Sweden emerging as the front-runner in a troubled search for a 2030 Olympics host is as much a surprise in Stockholm as elsewhere.
The year started with Sweden not on the radar of a Winter Games race where longtime favorite Sapporo faded during a criminal investigation of alleged bribery linked to the recent Tokyo Olympics. Salt Lake City is targeting 2034.
The picture changed when Swedish officials met last month in Switzerland with International Olympic Committee leaders who faced uncertainty and time running out to find a 2030 host.
Urging caution just one week after the Sweden Olympic Committee formally announced its interest, Von Uthmann said there is a June target to complete a feasibility study he is overseeing to reboot most of the 2026 plan.
Tesla recalls 362,000 U.S. vehicles over full self-driving software
Tesla Inc said it would recall 362,000 U.S. vehicles to update its Full Self-Driving (FSD) Beta software after U.S. regulators said on Thursday the driver assistance system did not adequately adhere to traffic safety laws and could cause crashes.
The National Highway Traffic Safety Administration said the Tesla software allows a vehicle to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash.”
Tesla will release an over-the-air (OTA) software update free of charge, and the electric vehicle maker said it is not aware of any injuries or deaths that may be related to the recall issue. The automaker said it had 18 warranty claims.
Maine lawmakers target Whole Foods for blacklisting lobster
Republican lawmakers in Maine are going after Amazon unit Whole Foods for its rebuke of the state’s signature seafood — Maine lobster.
Whole Foods stopped selling Gulf of Maine lobster at hundreds of its stores last year after a pair of sustainability organizations suspended lobster certifications over concerns the fishing gear could hurt endangered whales.
Maine officials have decried those actions — pointing out that no deaths of North Atlantic right whales have been linked to lobster gear.
Maine’s Senate Republican leader is now sponsoring a bill to strip Whole Foods from participation in the Business Equipment Tax Reimbursement program, which provided the grocer’s only store in Maine with a $36,671 reimbursement for 2021.
Sen. Trey Stewart accused Whole Foods of blindly following “incorrect science” and giving Maine’s $1.7 billion lobster industry a “black eye.”
Whole Foods had no immediate comment.
DocuSign shedding 10% of workforce
The e-signature and software business, DocuSign, is currently restructuring and said it will cut 10% of its staff in the company’s worldwide field organization.
In 2022, the company had 7,461 employees before it announced a 9% reduction of it staff in September, meaning roughly 680 DocuSign workers are now on the chopping block in the company’s latest cuts.
DocuSign also expects most of the restructuring charges will be incurred in the first quarter of fiscal 2024, and that the execution of the restructuring plan will be substantially complete by the end of the second quarter of fiscal 2024.
YouTube CEO Wojcicki, one of the first Google employees, steps down
YouTube Chief Executive and one of the first Google employees, Susan Wojcicki, is stepping down from her role at the tech giant that started in her garage nearly 25 years ago, she said in a personal update on the video-sharing platform on Thursday.
Wojcicki, 54, will be replaced by her deputy Neal Mohan, a senior advertising and product executive who joined Google in 2008.
The change of guard comes as YouTube’s advertising revenue fell for the second straight quarter amid intense competition for viewing time with short-form video services such as TikTok and Facebook’s Reels, and streaming services like Netflix.
One of the most prominent women in tech, Wojcicki said she will focus on “family, health, and personal projects”, and plans to take on an advisory role at Alphabet.
She was previously senior vice president for ad products at Google and became the CEO of YouTube in 2014.
Outback parent Bloomin’ Brands tops Wall Street profit estimates
Bloomin’ Brands Inc. on Thursday reported fourth-quarter earnings of $58 million.
The Tampa, Florida-based company said it had net income of 61 cents per share. Earnings, adjusted for non-recurring costs, were 68 cents per share.
The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 63 cents per share.
The owner of Outback Steakhouse and other casual dining spots posted revenue of $1.1 billion in the period, falling short of Street forecasts. Six analysts surveyed by Zacks expected $1.12 billion.
For the year, the company reported profit of $101.9 million, or $1.03 per share. Revenue was reported as $4.42 billion.Bloomin’ Brands expects full-year earnings in the range of $2.91 to $3 per share.
Hasbro forecasts gloomy 2023 as inflation pummels toy demand
Hasbro Inc forecast annual sales and profit below Wall Street estimates on Thursday, hammered by a slump in demand for its toys and games from customers reeling with rising prices.
Both Hasbro and its rival Mattel Inc had seen a steep drop in consumer spending in the crucial holiday season, putting to test the resilience of toymakers to economic slowdown as customers spend more on essentials.
The company also warned of a $300-million hit to revenue from a strong dollar and its exit from some licenses, brands and markets.
It lost the lucrative license to make Disney Princess toys to Mattel last year and is exiting Sesame Street and Trolls licenses this year, but is banking on a slate of blockbuster releases to support revenue.
Hasbro expects 2023 adjusted earnings per share between $4.45 and $4.55 compared with Refinitiv estimates of $4.88.
Revenue at Hasbro’s consumer products business — its largest and home to toys such as Nerf blasters and My Little Pony figures — is expected to decline mid-single digits in 2023, with overall revenue projected to be down low-single digits.
Paramount to raise streaming prices as ad slump knocks revenue
Paramount Global Inc will raise prices for its flagship streaming service in some markets this year, the CBS network owner said on Thursday, amid an extended weakness in the advertising market that has pressured revenue.
The company will increase the prices of premium and essentials tier of its streaming service Paramount+ in some markets. Prices will rise to $11.99 per month from $9.99 for the premium tier that includes Showtime, and to $5.99 from $4.99 for the essentials tier without Showtime. Paramount+ is set to integrate with the company’s other streaming platform Showtime — home to popular shows such as “Billions” and “Dexter” — later this year.
It expects impairment charge of $1.3 billion to $1.5 billion in the current quarter from the integration.
Paramount+ raked in 9.9 million new subscribers for the quarter ended Dec. 31, but the direct-to-consumer unit continues to grapple with losses due to huge investments in content.
Overall, Paramount earned 8 cents per share profit on revenue of $8.13 billion, compared with expectation of a profit of 23 cents on revenue of $8.16 billion, as per Refinitiv data.
Average long-term US mortgage rate jumps to 6.32% this week
The average long-term U.S. mortgage rate jumped this week to its highest level in five weeks, bad news for home shoppers heading into the spring buying season.
Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate rose to 6.32% from 6.12% last week. The average rate a year ago was 3.92%.
The average long-term rate reached a two-decade high of 7.08% in the fall as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and and bring down stubborn, four-decade high inflation.
London’s FTSE 100 tops 8,000 reaching record high
UK’s FTSE 100 rose to a record high on Thursday, underpinned by corporate earnings from Centrica and Standard Chartered, while higher commodity prices drove up heavyweight miners.
The blue-chip FTSE 100 FTSE gained 0.3%, trading comfortably above the 8,000-point mark it had breached in the previous session.
The exporter-heavy FTSE has had a stellar start to the year as positive corporate earnings and rising commodity prices supported the index.
“Having finally smashed through the 8,000 level on Wednesday, the FTSE 100 shows no signs that its batteries are running out of juice, rising another 0.4% to 8,032,” said Russ Mould, investment director at AJ Bell.
“For an index that’s been unloved for years, it’s refreshing to see the FTSE find its rhythm as this could help it win back some of the investors who turned their backs in 2016 when the Brexit vote was cast.
Reuters contributed to this report.
Shake Shack tops Wall Street profit estimates, meets revenue forecast
Shake Shack Inc. on Thursday reported a loss of $10.7 million in its fourth quarter.
The New York-based company said it had a loss of 27 cents per share. Losses, adjusted for non-recurring costs, were 6 cents per share.
The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 11 cents per share.
The burger chain posted revenue of $238.5 million in the period, which met Street forecasts.
For the year, the company reported a loss of $24.1 million, or 61 cents per share. Revenue was reported as $900.5 million.
Twilio’s better-than-expected earnings, buyback plans boost shares