Twitter Looks to Streamline Even As Musk Puts Acquisition “On Hold”
Financial Daily Dose 5.13.2022
May 13, 2022
Twitter CEO Parag Agrawal took dramatic action this week, firing two top execs, freezing “most new hiring,” and announcing plans to slash spending “as the social media company tries to change its business trajectory while grappling with a takeover from Elon Musk, the world’s richest man.” Agrawal noted that his moves “stemmed partly from Twitter not hitting goals in audience and revenue growth” - NYTimes and Bloomberg and WSJ
Meanwhile, Musk used a May 2 article about a recent regulatory filing by Twitter estimating that “spam and fake accounts represent less than 5 percent of the social network’s total users” as cause to put his takeover effort “temporarily on hold,” saying he wants to “confirm” those figures. As a reminder, under the terms of the purchase arrangement, Musk would face a $1 billion termination fee “if he backs out of the deal, though it [is] unclear how such a clause would apply if Mr. Musk determined Twitter’s user figures were incorrect” - NYTimes and WSJ and Bloomberg and MarketWatch and TechCrunch
More volatility on the Street yesterday, with the S&P 500 and its peers rallying late in the day but still closing down yet again and “inching closer to bear market territory.” This week’s skittishness among traders appears tied to Wednesday’s CPI release, which showed inflation still running hot - NYTimes and WSJ and Bloomberg and MarketWatch
For his part, Fed Chair Powell acknowledged on Thursday that the central bank’s moves to get rising prices under control will cause “some pain” but said the alternative—firmly entrenched inflation—is untenable - NYTimes and Bloomberg and Marketplace
Powell did so while the Senate was approving his re-nomination to the top job at the U.S. central bank by a 80-19 vote. Powell will retain control of a Fed that will see new faces joining as Governors, including Lisa Cook and Philip Jefferson, both of whom were confirmed just this week - NYTimes and Bloomberg and WSJ and Law360
American parents are struggling to find supplies of Similac baby formula (and answers for the “long-running shortage in products in store shelves”) after Abbott Laboratories said this week that “it would take weeks before products” from its shuttered Michigan plant are available on store shelves. The FDA paused production at Abbott’s Sturgis, Michigan factory in February over “possible contamination” of the formula. This, while Similac alternative Enfamil products “experienced delays in shipments and transportation earlier in the year” due to Covid-related supply-chain problems. Reckitt Benckiser Group owns both brands and controls 80% of the infant formula market in the U.S. - WSJ and HuffPost and NYTimes and Bloomberg
Stablecoin Terra’s “death spiral” this week is ginning up fears about stability in cryptocurrency markets and—as we saw from Treasury Secretary Yellen’s remarks midweek—raising concerns about a lack of regulatory action in D.C. to protect investors - NYTimes and WSJ
Couldn’t pass up this piece on what astronomers are calling the “first picture of [the] . . . supermassive black hole, a trapdoor in space-time through which the equivalent of four million suns have been dispatched to eternity” that lives at the center of our Milky Way galaxy. Whoa - NYTimes and Mashable
Stay safe, and have a great weekend,
The Robins Kaplan Financial Daily Dose features top stories and latest news headlines in financial markets, banking, securities and technology topics.
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