Read It And Eat 08/02

Welcome to ‘Read it and Eat’ — your go-to for bite-sized updates on corporate actions in finance, AI and anything I consider newsworthy. Join me twice a week for quick reads, where I serve up the latest insights that matter in the world of business.

Major Headlines

• Vladimir Putin grants interview with Tucker Carlson

• The enigmatic dictator who has been seen to have great disdain for all things Western media has surprisingly granted a first-ever sit-down interview to Former Fox News host and TV personality, Tucker Carlson in two years since the invasion of Ukraine. “Most Americans have no idea why Putin invaded Ukraine or what his goals are now. … Americans have a right to know all they can about a war they’re implicated in and we have the right to tell them about it,” Carlson said in a Tuesday video posted on social media site X from Moscow.” Carlson stated in a post on X (fka twitter). It can be argued that he is a supporter of Putin as he has been quoted to say “Why is Vladimir Putin such a bad guy? He’s not Saddam Hussein, he’s not Adolf Hitler, he’s not a danger to the United States” in 2017. He isn’t a fan of Ukrainian President Zelensky, stating that “He is a dictator. He is a dangerous authoritarian who has used a hundred billion in U.S. tax dollars to erect a one-party police state in Ukraine.” The interview would be released on X and his website, www.tuckercarlson.com. [https://www.cnbc.com]
  

• WeWork and the Second Coming of Adam Neumann

• WeWork’s founder, Adam Neumann took the company from nothing to a peak of $47 billion and eventually mismanaged it so terribly that he was ousted before its big IPO. The company eventually listed for a fraction of the price at $9 Billion and eventually filed for bankruptcy protection to be able to pay its creditors. Adam is exploring a ‘second coming’ as he extends a bid to buy back the company in conjunction with his new venture Flow and has had preliminary financing talks with Third Point Hedge fund. He has arranged a bankruptcy package, which details were not disclosed, in a letter sent to the company’s lawyers for the repurchase of WeWork. He, however, so far has been stonewalled by the company as his lawyers had this to say on the matter; “We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders.” [https://www.bloomberg.com]
  

• It Was a Break and not A Breakup; TikTok and Universal Music

• The social media behemoth TikTok licenses music from studios like Universal Music, Sony etc for its platform which allows its users to dance to, trend on, and make videos with the songs from those platforms. As of the 31st of January, Universal Music and TikTok could not agree on the negotiation of new terms, and Universal stated that it would sever ties with TikTok, which meant all the videos with songs from their catalogue of more than 4 million would be muted as it is a copyright violation. Universal Music claimed in an open letter that TikTok is not willing to compensate artists fairly when their songs are used as backing tracks on user-generated clips. However, TikTok alleges that it is a ploy from Universal to squeeze more money and that what the platform lacks in payment to artists for streams in comparison to platforms like Spotify, they make up for it greatly in generous free advertising that lets smaller artists reach a broader range of audiences, as evidenced in the fact that songs that go viral on TikTok lead to the songs topping charts. An example of this is Rick Astley’s ‘Never Gonna Give You Up’. However, the two companies have stated that they are considering going back to the negotiation table as it is a mutually beneficial relationship. [https://www.reuters.com]
  

• King Charles III; has prostate cancer

• It is a sombre day in Buckingham Palace as the reigning King has been diagnosed with cancer. The type of cancer has not been revealed — it is not prostate cancer but was discovered during his recent treatment for an enlarged prostate. The King began “regular treatments” on Monday and will postpone public duties during it, the Palace said. The Monarch, 75, “remains wholly positive about his treatment and looks forward to returning to full public duty as soon as possible,” it added. No further details are being shared on the stage of cancer or a prognosis. He has been visited by his sons Andrew and Harry. [https://www.bbc.co.uk]
  

Minor Headlines

• Barrat buys rival Redrow in a £2.5 billion all-stock merger agreement. [https://www.cityam.com]

• A total of 32,000 jobs were cut as the tech industry braces for AI implementation and overhaul. [https://www.wsj.com]

• An Investment Banker and billionaire in China goes missing. [https://www.bbc.co.uk]

• Do-Kwon’s former CFO of Terraform Labs was extradited to South Korea from Montenegro to stand trial in a criminal suit. [https://finance.yahoo.com]

• Snap Inc shares fall a further 31% after missing 2023 Q4 analyst revenue expectations and also issuing a disappointing Q1 forecast, which include plans to cut workforce by 10%. [https://www.cnbc.com/]

• BlackStone is exploring a possible acquisition of skin-care company L’Occitane International. [https://www.bloomberg.com/]

• DoorDash aims to expand overseas as its competitors struggle to maintain profitability. [https://www.bloomberg.com/]

• America’s Most Expensive home for sale hits market at a $295 million asking price in Naples, Florida. [https://www.wsj.com/]
  

NEWS OF THE DAY

META; La Cucaracha Que Simplemente No Muere (The Cockroach that refuses to die)

It seems like Meta is the company that just doesn’t die. The past two years have been tough for Meta, they made a $36 billion dollar investment in the Metaverse, betting on it to be the next big thing and even changing the entire name of its parent company and stock ticker which showed his devotion to moving the company to be the forefront of the metaverse.

However, unfortunately, the Metaverse ended up being a fad for those particularly interested in that niche. In broader terms, it was to be at the forefront of the Virtual Reality (VR) space and its mass adoption. This was overtaken by the wildfire that is general-purpose Artificial Intelligence and CHATGPT. In addition, major privacy changes made by Apple affected its ability to advertise to targeted customers, rising interest rates and also the rapid rise of its competitor TikTok all added to the thousand cuts that aimed to end the company as its share price fell by more than 60% in 2022. However, as of the 2nd of February alone, after the reporting of their earnings, the shares rose by 20%. As of Q4 of 2023 its shares rose 69% and the earnings per share was up 79% YoY from the previous year as its net income more than tripled and its revenue rose 25%. They just REFUSE to die, Ellos estan saliendo a pelear. According to Zuckerberg “Meta’s success, though, required paring down. It reduced operating expenses in 2023 by laying off some 20,000 people, slashing its headcount by 22%. It spent $2.5 billion on “facilities consolidation,” or reducing its office footprint. The changes were part of a plan to make the company “leaner” so it would be better able to weather volatility over the next five to 10 years,” For the cherry on top, they state that for the first time ever they would be paying 50c for every share in dividend, this added $200 billion to its market cap and quietly pushed it into and above the trillion-dollar valuation at $1.2 trillion. Find the full earnings report here. [https://www.cnbc.com]

Gen-Z Word of the Day:

McMansion

A large and pretentious house, typically of shoddy construction, typical of “upscale” suburban developments in the late 20th and early 21st centuries. Such houses are characterized by steep roofs of complex design, theatrical entrances, lack of stylistic integrity and backsides which are notably less fussy than their fronts. They are often placed closely together to maximize the developer’s profits and appeal to people who value perceived social status over actual, physical, economic or historic value.