Category Archives: Business

Business

Amazon’s connected device cart grows with $1.7 billion deal for Roomba maker

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Aug 5 (Reuters) – Amazon.com Inc (AMZN.O) will acquire iRobot Corp (IRBT.O), maker of robotic vacuum cleaner Roomba, in an all-cash deal for about $1.7 billion, in the latest push by the world’s largest online retailer to expand its stable of smart home devices.

Amazon will pay $61 per share, valuing iRobot at a premium of 22% to the stock’s last closing price of $49.99.

iRobot’s shares rose 19% in early Friday trading to $59.56. At its peak during pandemic lockdowns, iRobot was trading at more than twice that price as hygiene-conscious consumers invested in premium vacuum cleaners.

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Amazon already owns virtual assistant Alexa, Ring, which monitors homes, and a smart thermostat, giving it a range of products in the “internet of things” category, said Ethan Glass, an antitrust expert with law firm Cooley LLP.

He said the U.S. Federal Trade Commission, which is already investigating Amazon, would likely review the transaction.

“I would say there is a three out of four chance of a deep investigation and a one out of four chance of a challenge,” he said. “The political appointees have made clear that they would rather go to court and lose than let a deal through that later is criticized as anti-competitive, especially as they seek to change the laws.”

Charlotte Slaiman of Public Knowledge added that antitrust enforcers now saw the risk of under-enforcement as an issue rather than just over-enforcement. “The costs of inaction are much higher than antitrust experts used to think,” she said.

Besides sweeping up dirt, Roomba vacuums that cost as much as $1,000 collect spatial data on households that could prove valuable to companies developing smart home technology.

But iRobot’s fortunes took a hit as consumers started rethinking how they spend their money amid rising inflation. Its second-quarter revenue fell 30% on weak demand from retailers in North America and Europe, Middle East and Africa.

The deal comes at a time analysts expect cash-rich technology companies to go on an M&A spree to take advantage of low valuations due to growth pressures. Amazon currently has cash and cash-equivalents of more than $37 billion.

Devices make up a fraction of overall sales at Amazon, but include smart thermostats, security devices and it has recently launched a canine-like robot called Astro.

“It seems like (CEO) Andy Jassy is going to employ M&A more than (predecessor) Jeff Bezos and it makes more sense to me now that Amazon is bigger and has more cash,” said D.A. Davidson analyst Thomas Forte.

If the deal falls through, Amazon would be required to pay iRobot a $94 million termination fee. On completion of the deal, Colin Angle would remain as the chief executive of iRobot.

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Reporting by Akash Sriram and Nivedita Balu in Bengaluru Additional reporting by Diane Bartz in Washington
Editing by Arun Koyyur and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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Workers in these two industries are the only ones coming out ahead right now

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But in reality, only workers in two industries — leisure and hospitality and retail trade — are actually coming out ahead, once inflation is taken into account.

Overall, wages and salaries for private industry workers rose by 4.2% between December 2019 and this past June, before rising prices are considered, according to an analysis of Employment Cost Index quarterly data by Jason Furman, an economics professor at Harvard University.

However, once inflation is factored in, paychecks actually shrank by 1.2% over that time period, the analysis found.

US consumer prices jumped by 9.1% year-over-year in June, the highest level in more than 40 years, according to the Bureau of Labor Statistics.

“Workers have had more bargaining power to get larger wages, but firms have also had power to set higher prices,” said Furman, also a former chair of the Council of Economic Advisers in the Obama administration. “And the prices are beating the wages.”

Where wages are rising

Leisure and hospitality workers, which includes waiters, cooks and hotel clerks, have been in high demand after being hit hard by job losses when nonessential businesses shuttered at the start of the pandemic. Their wages have grown by 0.9% since December 2019, after accounting for inflation, according to Furman’s analysis.

While the overall economy has now regained all the jobs it lost during the pandemic, the leisure and hospitality sector is still 1.2 million positions, or 7.1 percent, below its February 2020 level, according to the Bureau of Labor Statistics’ monthly jobs report, published Friday.

Retail workers, such as salespeople, cashiers and customer service representatives, have also been wooed by employers. This has led to a 0.2% inflation-adjusted bump in wages for them. Employment in this sector is 208,000 above its level in February 2020.

But even employees in these industries have seen their pay boosts erode this year as inflation continues to climb. Wage increases for leisure and hospitality workers and for retail employees had been 2% and 1.2%, respectively, over the two years ending December 2021.

Employers in lower-wage industries really had to boost pay in order to hire and maintain the staff needed to meet demand in 2021, said Skanda Amarnath, executive director of Employ America, which advocates for a high-wage, high-employment economy.

“Right now, CPI is just way too strong relative to everything else,” he said of the Consumer Price Index, a popular inflation measure.

And where they are falling

In all other industries, inflation-adjusted wages have dropped since the end of 2019, led by utility workers with a 2.7% decline.

Those employed in construction and information technology have seen their pay slip by 1.8%, while manufacturing and financial sector workers have experienced a 1.7% drop.

Even wholesale trade workers, such as truck drivers, who have also been in demand during the pandemic as supply chains snarled, have lost ground. Their wages have declined 0.6% since December 2019. That’s a reversal from the end of 2021, when their pay was up 0.1% over the prior two years.

The Employment Cost Index report is watched closely by the Federal Reserve to monitor the extent to which skyrocketing inflation is boosting wages. The data helps the Fed determine how much to hike interest rates.

But the Fed looks at wage growth before the impact of inflation, and that has remained strong. The 5.3% jump over the year ending in June was the highest since the spring of 1983.

So despite the decline in inflation-adjusted wages in most industries, the Fed is expected to continue raising interest rates this year to try to slow the rise in prices, economists say.

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Amazon is buying iRobot for $1.7B – TechCrunch

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Amazon this morning announced plans to acquire iRobot for an all-cash deal valued at $1.7 billion. The home robotics firm, best known for pioneering the robotic vacuum, was founded in 1990 by  MIT Artificial Intelligence Lab members Colin Angle, Rodney Brooks and Helen Greiner. Twelve years after its founding, the company introduced the Roomba, a brand that has since become synonymous with the branding, selling more than 30 million units as of 2020.

Brooks and Greiner have gone on to found and lead several other companies, while Angle has remained on-board as CEO — a position he will maintain post-acquisition.

“Since we started iRobot, our team has been on a mission to create innovative, practical products that make customers’ lives easier, leading to inventions like the Roomba and iRobot OS,” CEO Colin Angle said in a release. “Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.”

Amazon, too, has been aggressively tackling the robotics space in the decade since it acquired Kiva Systems, though the Amazon Robotics division is focused solely on its warehouse/fulfillment play. More recently, the company has made small steps into the home with the launch of Astro, a cheery ‘bot that lacks the Roomba’s single focus.

iRobot CEO Colin Angle, Image Credits: (Photo by Paul Marotta/Getty Images for TechCrunch)

“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” Amazon Devices SVP Dave Limp said in the release. “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive—from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin. Customers love iRobot products—and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”

Amazon and iRobot have had an increasingly close partnership over the past several years, through Roomba’s embrace of Alexa functionality and use of AWS servers. Angle, too, has often spoken about Roomba — and home robots generally — as a kind of connective tissue for the smart home. “The home of the future is a robot,” he noted in an interview with TechCrunch. “And the vacuum cleaners and the other devices are hands and eyes and appendages of the home robot. Ultimately, this smart home of the future isn’t controlled by you cell phone. If you have 200 devices, you’re not going to turn them on by pulling out your cell phone. We need a home that programs itself, and you just live in your home, and the home does the right thing based on understanding what’s going on.”

The company has, however, found difficulty recapturing the Roomba’s success — but not for lack of trying. It has experimented with several different home robot services, from cleaning gutters and pools to mopping floors and mowing the lawn. The latter arrived in the form of Terra, which has been put on indefinite hold during the pandemic. That news came in April 2020, alongside word the company had laid off 70 employees, comprising around 5% of its global workforce.

Amazon’s home robot, Astro

During a Twitter Spaces last month Angle told me with regards to finally launching Terra, “What we said in the latest call is that we are working on non-floor-cleaning robots. Interpret that as you will.” Having the tremendous resources of Amazon behind it will no doubt accelerate its ability to launch non-Roomba systems. The company was founded on such experimentation, as well, having built everything from baby dolls to military machines before hitting gold with Roomba.

The company spun off its military contract wing in 2016 as Endeavor, which went on to be acquired by FLIR systems in early 2019. A year prior, iRobot spun out the telepresence robotics startup, Ava. iRobot has made its own acquisitions, as well, purchasing connected air purifying company Aeris late last year, in a bid to diversify its in-home presences.

Image Credits: Amazon

The acquisition is pending the standard regulatory scrutiny. The companies will have to convince regulators — among other things– that they are maintaining the proper privacy safeguards. Amazon’s acquisition of Ring has raised all manner of red flags for advocacy groups, and its ownership of a the world’s most popular in-home robot will almost certainly raise eyebrows. Recent versions of the Roomba have increasingly sophisticated sensors built-in for building 3D maps of users homes.

The deal ranks among Amazon’s largest during what’s been an especially active moment for the retail behemoth. It follows recent massive deals for OneMedical and MGM. If it closes, the acquisition could represent a watershed moment for home robotics. For a decade, Roomba (and the army of robot vacuums that have followed) has been the only truly mainstream home robot, as names like Anki, Jibo and Kuri have failed to reach mainstream consumers. With its acquisition of iRobot, Amazon is no doubt hoping it can do for the home what it’s succeeded in accomplishing with industrial robotics.

A decade after its acquisition of Kiva, Amazon Robotics is almost universally recognized as the warehouse and fulfillment robotics space amid a pandemic-fueled boom. Can its purchase of iRobot do the same for the home?

 

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Dow futures slide 200 points after strong jobs report likely to keep Fed in hiking mode

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Cramer on why stocks reacting negatively to jobs report

“This number is extraordinary. We’re a growth country. The rest of the world is not,” said Jim Cramer on CNBC’s “Squawk Box” after the strong report.

But Cramer cautioned about what it means for stock prices and explained why we are seeing the negative reaction in the futures.

“It means that obviously when they (the Fed) come back it stays hot they will do another three-quarters,” Cramer said. “That’s not what we thought. Remember we kind of bought this market on the idea that they are at 50 (basis points).”

After increasing rates by 0.75 percentage point for a second straight time last week, the central bank will next meet to decide on interest rates in September. Traders hoped they would slow the pace to a half point hike at that meeting. The S&P 500 is up 8% in the past one month through Thursday’s close.

—John Melloy

Stock futures slump after better than expected jobs report

Stock futures fell Friday after the July jobs report came in much stronger than expected, showing more jobs added, a lower unemployment rate and higher wage growth than economists forecast.

Dow futures slipped 231 points, or 0.71%. Futures tied to the S&P 500 fell 1.08% and Nasdaq futures shed 1.33%.

—Carmen Reinicke

July jobs report crushes expectations

The U.S. economy added many more jobs than was expected last month. On Friday, the U.S. government said 528,000 jobs were added in July, easily beating a Dow Jones estimate of 258,000.

To be sure, average hourly earnings were up 5.2% year over year — well above expectations. This could be seen by the market as a sign that inflationary pressures remain strong.

Click here for the full story.

—Fred Imbert

Elon Musk thinks we’re past peak inflation

Elon Musk said that he thinks we are past peak inflation, and predicts a mild, 18-month recession ahead.

Musk’s comments came at the Tesla 2022 shareholder meeting, held Aug. 4.

“We do get a fair bit of insight into where prices of things are going over time because when you’re making millions of cars, you have to purchase commodities many months in advance of when they’re needed,” he said.

—Carmen Reinicke

Amazon to acquire iRobot in $1.7 billion deal

Amazon will acquire iRobot for $61.00 per share, the consumer robot company announced on Friday. The all-cash transaction is valued at approximately $1.7 billion, including iRobot’s net debt.

Shares of iRobot were halted on the news. The sale price of $61 per share is a 22% premium to Thursday’s close of $49.99. Amazon’s stock was up about .2% in pre-market trading.

—By Michelle Fox

DoorDash surges after record orders

A delivery person for Doordash rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., November 13, 2020.

Carlo Allegri | Reuters

Shares of DoorDash were up more than 10% in premarket trading Friday after the company reported quarterly results that beat expectations after market close Thursday. The food delivery service said orders grew 23% on the year last quarter, and revenue surged 30%.

The company does expect softer consumer spending in the second half of the year, it said.

—Carmen Reinicke

Oil set for steep weekly loss

Oil prices were moderately lower during Friday morning trading on Wall Street and on track for steep weekly losses. Concerns around a slowdown in demand have sent prices tumbling in recent sessions.

West Texas Intermediate crude futures, the U.S. oil benchmark, is down 10.5% for the week, while international benchmark Brent crude has shed 14.5%.

— Pippa Stevens

Bitcoin, Ether on track for worst week since July 1

Cryptocurrencies have slumped this week after a rough start to the month. Bitcoin and Ether are both down about 3% week to date and on pace to post their first negative week in five.

The performance would also be the worst weekly drop since July 1, when Bitcoin lost 8.71% and Ether shed 13%.

—Carmen Reinicke

Warner Bros. plunges

Leslie Grace attends Warner Bros. Premiere of “The Suicide Squad” at The Landmark Westwood on August 02, 2021 in Los Angeles, California.

Axelle/bauer-griffin | Filmmagic | Getty Images

Stifel raises second-half S&P 500 target

Stifel’s Barry Bannister hiked his S&P 500 target for the second half to 4,400 from 4,200, noting he continues to prefer cyclical growth stocks in sectors such as software and media.

Here are two reasons Bannister gave for his target bump:

  • The “S&P 500 sell-off in 1H22 is still being reversed.”
  • “The S&P 500 also discounts negative y/y S&P 500 EPS in 2022, but we see 2022 EPS holding its own.”

Bannister’s new target implies 6% upside from Thursday’s close.

—Fred Imbert

European stocks flat ahead of key U.S. jobs report

European markets were flat on Friday morning as investors tracked corporate earnings and awaited the key U.S. jobs report.

The pan-European Stoxx 600 was little changed in early trade. Autos gained 0.8% while insurance stocks fell 0.8%.

Earnings continue to drive individual share price movement in Europe. Allianz, Deutsche Post, the London Stock Exchange Group and WPP were among the companies reporting before the bell on Friday.

– Elliot Smith

Asia markets shake off fears over military tensions around Taiwan

Markets in Asia-Pacific rose on Friday as investors shook off fears over China’s military exercises near Taiwan, which follow U.S. House Speaker Nancy Pelosi’s visit to the self-ruled island this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.74%. Mainland China’s Shanghai Composite gained 0.28% and the Shenzhen Component increased 0.64%.

The Taiex in Taiwan jumped more than 2%, with chipmaker TSMC rising 2.8%.

Lower headline jobs number doesn’t mean a weaker economy, investor says

If Friday’s jobs report shows the U.S. economy added fewer workers in July than the previous month, it is not necessarily a sign of economic weakness, according to Brad McMillan, CIO at Commonwealth Financial Network.

“If we do see a reduction in hiring, even at the expected number, it looks much more likely to be due to a shortage of workers, rather than a sudden shock to labor demand,” McMillan said in a note. “With demand strong, what matters here is labor availability.”

— Yun Li

Some on Wall Street don’t think the comeback rally can sustain

The Fed’s commitment to bring down inflation as well as easing recession fears have sparked a relief rally in the market. The S&P 500 is now 14.2% above its 52-week intraday low of 3,636.87 from June 17. The benchmark index is also coming off its best month since November 2020, gaining more than 9% in July.

However, some on Wall Street are skeptical that the rally can sustain for much longer. Max Kettner, chief multi-asset strategist at HSBC Bank said the comeback is “wishful thinking,” and he would need to see further repricing of rate hike expectations and another sharp drop in real yields to believe it.

Widely followed Mike Wilson from Morgan Stanley also called this rally short-lived as corporate earnings are beginning to deteriorating.

Consumer discretionary leading the gains, energy biggest laggard this week so far

Six out of the 11 S&P 500 sectors were in the green week to date, led by consumer discretionary, which has gained 2.9%.

The most negative sector this week has been energy, which has fallen more than 8% and is on track for its worst week since June 17. The decline in energy names came amid a drop in oil prices. WTI is down over 10% this week, on pace for its worst week since April.

— Yun Li

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Jobs Report Updates: Growth Expected to Slow in July

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Credit…Scott McIntyre for The New York Times

For months, as inflation has risen and the Federal Reserve has acted aggressively to tamp it down, a question has hovered over the monthly employment reports: Has the labor market succumbed to gravity yet?

The answer, so far, has been, “No, mostly not.” But in the July report, arriving on Friday, the answer is likely, “Yes, but it hasn’t crashed into the ground.”

Ever since supply chain problems and the war in Ukraine sent prices skyrocketing, the brightest feature of the economy has been robust job growth, with 6.3 million jobs added over the past 12 months. As of June, the United States was within 520,000 jobs of its prepandemic peak, held down by a decline in government employment.

But that recovery has come under increasing strain as inflation has eaten into consumers’ spending power and darkened their moods, and as rising interest rates have begun to weigh on demand for large purchases like homes and cars. Gross domestic product, adjusted for inflation, declined for the second quarter in a row, held back by slower growth in inventories and falling residential investment.

And, lately, there have been signs that the economic headwinds are affecting the labor market as well. Job openings have fallen from their record highs in the spring, driven down by waning demand for retail, leisure and hospitality workers. Initial claims for unemployment insurance crept up to 260,000 a week last month from a low of 166,000 a week in March. Hiring on LinkedIn has been slowing since April, particularly in construction and hotel accommodations.

On average, forecasters expect the report on Friday to show that the nation added 250,000 jobs in July. Last month’s report showed a gain of 372,000 in June, on a par with the three previous months.

The polling and analytics firm Morning Consult, which surveys about 20,000 people a week, has noticed an increase in the number of adults in the United States who are reporting having lost income because of layoffs or reduced hours. Consistent with research showing that people of color are the first to be affected when hiring slows, those increases have been sharpest among Black and Hispanic workers.

The uptick in income losses hasn’t, however, been concentrated in sectors sensitive to spikes in coronavirus transmission, as was the pattern since 2020.

“It’s not a Covid story — I think it’s a broader macro slowdown,” said Morning Consult’s chief economist, John Leer. “People were hoarding workers, and, right now, we’re at a point where it makes sense to let them go because of business cycle uncertainty.”

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AMC declares special dividend, posts quarterly loss

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AMC Entertainment CEO and president Adam Aron tells ‘The Claman Countdown’ theater attendance is up 15% from pre-pandemic levels.

AMC Entertainment Holdings posted a bigger-than-expected loss as costs surged nearly 60% in the second quarter.

The company also said it will pay a special dividend in the form of preferred shares.

Shares of the once popular meme stock are 7% lower in premarket trading as the move raised concerns of a possible equity dilution.

AMC’s preferred shares could be converted to common stock if investors approve of the move.

AMC CEO: MOVIEGOERS SPENDING DESPITE INFLATION

Photo shows AMC Empire 25 theatre in Times Square in New York.  (Photo by Evan Agostini/Invision/AP, File / AP Newsroom)

The company will give one preferred share for every AMC common stock held.

AMC is planning to list about 517 million preferred shares on the New York Stock Exchange under the symbol “APE”.

AMC CEO Adam Aron. (Fox News / Fox News)

“This new AMC Preferred Equity gives AMC a currency that can be used in the future to strengthen our balance sheet, including by paying down debt or raising fresh equity,” Chief Executive Adam Aron said.

AMC REVENUE QUINTUPLES AS MOVIEGOERS RETURN TO THEATERS

Quarterly revenue rose to $1.17 billion, edging past estimate of $1.16 billion, while net loss of 24 cents per share was bigger than market expectation of 21 cents, according to Refinitiv data.

The box office at the AMC Lincoln Square 13 movie theater in New York. (Jeenah Moon/Bloomberg via Getty Images / Getty Images)

Ticker Security Last Change Change %
AMC AMC ENTERTAINMENT HOLDINGS INC 18.67 +0.46 +2.52%

AMC’s market value had skyrocketed last year in a retail investor driven rally, helping it raise billions of dollars in equity capital even at the cost of investor concern of an erosion in the value of its stock.

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During the peak of the coronavirus pandemic, AMC faced heavy losses as restrictions forced theaters to shut again.

Reuters contributed to this report.

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‘Crypto Is Dead’ Calls Overdone, Says Analyst As Bitcoin (BTC), Ethereum (ETH) Hold It Together

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Most major coins traded lower Thursday evening as the global cryptocurrency market cap declined 1.2% to $1.06 trillion at press time.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD -1.8% -4.9% $22,668.99
Ethereum ETH/USD -2.2% -6.4% $1,611.71
Dogecoin DOGE/USD 0.5% -2.6% $0.07
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Flow (FLOW +38.6% $2.63
Trust Wallet Token (TWT) +11.6% $1.16
1inch Network (1INCH) +7.3% ​​$0.84

See Also: Best USDC Interest Rates

Why It Matters: Risk assets were not aligned at press time, with Bitcoin and Ethereum treading red, while stock futures were in the green. S&P 500 and Nasdaq futures were up 0.2% and 0.3%, respectively, at press time.

Edward Moya, a senior market analyst with OANDA, said that while Bitcoin’s correlation with equities is still intact, the digital asset has underperformed for the past few sessions. 

“An increase with Fed rate hike expectations has capped how high Bitcoin can go for now, but as long as traders remain confident that the peak in Treasury yields remains in place, Bitcoin may have bottomed already,” wrote Moya in a note, seen by Benzinga. 

However, Moya is confident about cryptocurrencies as a whole. “Calls that crypto is dead have been overdone. In fact, crypto is alive and well.”

The analyst’s optimism was based on Coinbase Global Inc COIN announcing a partnership with BlackRock that would allow the latter’s investment management platform direct access to cryptocurrencies.

Meanwhile, yields on 10-year Treasury notes declined 5.3 basis points to 2.696% on Thursday. The gap between yields on the two-year and 10-year Treasury notes closed lower by 35.7 basis points to reach its lowest inversion since 2000, reported Reuters. Stocks have largely ignored this inversion, according to Moya.

Delphi Digital pointed out in a note that historical data shows that when the Fed Funds rate is above that of neutral interest rates, “recessions tend to occur.”

Neutrality on rates implies that any further rate hikes by the U.S. Federal Reserve will translate into restrictive action.

Difference of Fed Funds Rate Vs. Neutral Rate ad Inflation — Courtesy Delphi Digital

“Economic factors such as stock market cap-to-GDP, consumer sentiment with its relationship to unemployment, and declining GDP, implies the current market move is a bear market rally,” said the independent research boutique. 

Cryptocurrency trader Justin Bennett said that the total market cap could touch the $1.15 trillion mark should it reclaim $1.05 trillion levels.

Read Next: Coinbase Asks Supreme Court To Halt User Lawsuits Relating Dogecoin And Scammers



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Jack Dorsey-led Block posts $1.5B in Q2 profits, BTC revenue down

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Former Twitter CEO Jack Dorsey’s digital payments firm Block Inc. saw its year-on-year (YoY) profits soar 29% to $1.47 billion in Q2, though its Bitcoin business slumped on decreased customer demand and a fall in Bitcoin (BTC) prices.

The financial services firm primarily generates Bitcoin revenue by providing BTC trading services via its digital payments application Cash App.

Block Inc. noted the business generated $1.79 billion of Bitcoin revenue in the quarter, down 34% YoY, while Bitcoin gross profit was only $41 million, which suggests it may be a high-cost venture to provide Bitcoin services to its customers.

Block Inc. said the fall in Bitcoin revenue was attributed to “broader uncertainty” in crypto assets, stating:

“The year-over-year decrease in Bitcoin revenue and gross profit was driven primarily by a decline in consumer demand and the price of bitcoin, related in part to broader uncertainty around crypto assets, which more than offset the benefit of volatility in the price of Bitcoin during the quarter.”

However, Block Inc. emphasized that the BTC profit slump doesn’t reflect the broader performance of the business. It also noted that BTC profits will likely fluctuate over time as a result of “changes in customer demand or the market price of Bitcoin.”

The company also noted that it recognized a $36 million impairment loss on its BTC holdings, however this is likely just a loss on paper.

Under U.S. accounting procedures, crypto is classified as an intangible asset on balance sheets and companies must report a loss when the price of the asset drops below its cost basis, even if a gain or loss has been realized through a sale during the given quarter.

The company noted that as of June 30, 2022, the fair value of its investment in Bitcoin is $160 million based on market prices.

Related: Interview with Kevin O’Leary: $28K Bitcoin next or lower? | Market Talks with Crypto Jebb

Investors appear un-impressed with Block Inc.’s performance in Q2 however, as the firm’s stock SQ has dipped by 7.42% in after-hours trading to sit at $83 at the time of writing.

Bloomberg suggested this was due to the company reporting lower than expected transaction volume at $52.5 billion, as opposed to the estimated $53.47 billion.

Bitcoin from the Block

Dorsey, the fervent Bitcoin maxi, has been relatively quiet about his plans for digital gold since announcing that Block Inc. was bypassing the Web3 model to build the Bitcoin blockchain-focused Web5 project in June.

Web5 is essentially a decentralized web platform, or DWP, that allows developers to create decentralized web apps via DIDs and decentralized nodes, which will also have a monetary network built around BTC, and not smart contract backed tokenization.



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Gas prices are finally coming down, but how far?

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Gas prices are displayed at an Exxon gas station on July 29, 2022 in Houston, Texas. (Photo by Brandon Bell/Getty Images)

Gas prices in the United States have fallen for the 50th consecutive day, the fastest rate in over a decade, according to the American Automobile Association. 

The national average gas price currently sits at $4.13 a gallon, with eight states seeing prices drop underneath $4 a gallon.

In June, gas prices had peaked at an eye-watering $5.02 a gallon.

Currently, the average price of a gallon of gas in New York is $4.48 and $4.35 in New Jersey. In Connecticut, the average price has fallen to $4.31.

The nation’s cheapest gas can be found in Texas, where a gallon of regular is currently $3.69 on aveage.

“Consumers appear to be taking the pressure off their wallets by fueling up less,” AAA spokesperson Andrew Gross said. “And there’s reason to be cautiously optimistic that pump prices will continue to fall, particularly if the global price for oil does not spike. But the overall situation remains very volatile.”

President Joe Biden tweeted earlier this week that the current drop of gas prices is the fastest the nation has seen in over a decade.

However, Biden’s critics didn’t miss an opportunity to point out that gas is still nearly $2 a gallon more expensive than it was when Biden took office.

That said, gas prices could continue to drop in the future.

“If gas demand remains low as stocks increase, alongside a continuing reduction in crude prices, drivers will likely continue to see pump prices decline,” AAA said. 

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Morgan Stanley on market bottom and tech stocks, Nasdaq

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