Twitter’s earnings falter as it fights with Musk
Twitter is embroiled in a legal fight with Elon Musk as he tries to back out of a $44 billion acquisition of the company. It has slowed its hiring as it grapples with a flagging economy. Its stock price has slumped. On Friday, Twitter revealed the toll from those challenges. The company said in an earnings report that revenue was down 1% from a year earlier. Twitter’s revenue fell 2% from the first to second quarter, which roughly coincides with the periods immediately before and after Musk made his move on the company.
Recession alarm is ringing on Wall Street
The yield curve, Wall Street’s most talked about recession indicator, is sounding its loudest alarm in two decades. The indicator is a way of showing how interest rates on U.S. government bonds compare. Every once in a while, short-term rates rise above long-term ones. That negative relationship contorts the curve into what’s called an inversion. An inversion has preceded every U.S. recession for the past half-century. It is happening now. “The yield curve is not the gospel, but I think to ignore it is at your own peril,” said Greg Peters, co-chief investment officer at asset manager PGIM Fixed Income.
T-Mobile reaches $500M settlement in 2021 data breach
T-Mobile has agreed to a settlement totaling $500 million in a class-action lawsuit filed by customers after the company disclosed in August 2021 that sensitive data had been breached in a cyberattack. In a court filing Friday, the mobile phone giant said it would pay $350 million to settle the customers’ claims and spend $150 million over the next few years bolstering its cybersecurity protection and technologies. The breach affected 76.6 million people in the United States, according to the company. It was not clear how much individual T-Mobile customers would receive from the settlement.
European Central Bank raises rates for first time in 11 years
The European Central Bank raised its key interest rates by half a percentage point Thursday, the first increase in more than a decade and a bigger jump than expected, as it ramped up its fight against record high inflation. Consumer prices in the countries that use the euro are soaring at their fastest rate in generations, reaching 8.6% in June from a year earlier, driven by rising energy and food prices. The bank, which had indicated that it intended to raise rates by only a quarter-point, said further rate increases would be appropriate at upcoming meetings but that decisions will be made at each meeting depending on data.
Amazon to acquire One Medical clinics
On Thursday, Amazon announced its first major acquisition under Andy Jassy’s tenure as CEO, spending $3.9 billion for One Medical, a chain of primary care clinics. One Medical’s share price was down more than 80% since its peak last year, and, in a statement, Amazon said it would acquire the company for $18 per share in an all-cash transaction. Based in San Francisco, One Medical operates 188 medical offices and provides virtual medical services that patients access with a $199 annual membership. One Medical went public in 2020 at $22.07 a share. After hitting a peak of $58.70 last year, its stock price closed Wednesday at $10.18.
Ex-Coinbase employee, 2 others charged with insider trading of crypto assets
Federal authorities filed charges against a former Coinbase employee and two other men in an insider-trading case involving confidential information about cryptocurrency assets about to be posted on Coinbase’s exchange, according to documents filed Thursday. The men were involved in trades over 10 months using information about 14 listings on Coinbase that generated about $1.5 million in illegal profits, according to federal prosecutors in Manhattan. The men were charged criminally with three counts of wire fraud and conspiracy to commit wire fraud. It is the first time authorities have filed criminal insider-trading charges involving cryptocurrency assets, said Damian Williams, U.S. attorney for the Southern District of New York.
Google fires engineer who claims its AI is conscious
Google fired a senior software engineer, Blake Lemoine, on Friday, more than a month after he raised ethical concerns about how the company was testing an artificial intelligence chatbot that he believes has achieved consciousness. A Google spokesperson, Chris Pappas, said Lemoine “chose to persistently violate clear employment and data security policies that include the need to safeguard product information.” The company, which denies that its chatbot language model is sentient, had placed Lemoine on paid leave in June. Lemoine confirmed his dismissal Friday, and said he was meeting with lawyers to review his options.
China Evergrande CEO resigns after loans come under scrutiny
China Evergrande, the embattled Chinese property developer, said late Friday its CEO had resigned, the latest setback for the company as it struggles to manage its crushing $300 billion in debt. In an announcement, the company said CEO Xia Haijun had resigned over his involvement in a plan to funnel $2 billion into Evergrande’s coffers from one of its subsidiaries. A preliminary investigation found the funds, belonging to Evergrande Property Services, had been used as collateral to guarantee a series of loans, money that was then diverted to Evergrande through a third party, the company said.