- Jennifer Lopez, Ben Affleck look cozy on a couch while furniture shopping for new $60M mansion Page Six
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- Jennifer Lopez packs on PDA with Ben Affleck amid new album release Geo News
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Tag Archives: Furniture
Despite ban, China nuclear-weapons lab has bought U.S. chips for years
SINGAPORE — China’s top nuclear-weapons research institute has bought sophisticated U.S. computer chips at least a dozen times in the past two and half years, circumventing decades-old American export restrictions meant to curb such sales.
A Wall Street Journal review of procurement documents found that the state-run China Academy of Engineering Physics has managed to obtain the semiconductors made by U.S. companies such as Intel Corp.
INTC,
-6.41%
and Nvidia Corp.
NVDA,
+2.84%
since 2020 despite its placement on a U.S. export blacklist in 1997.
The chips, which are widely used in data centers and personal computers, were acquired from resellers in China. Some were procured as components for computing systems, with many bought by the institute’s laboratory studying computational fluid dynamics, a broad scientific field that includes the modeling of nuclear explosions.
Such purchases defy longstanding restrictions imposed by the U.S. that aim to prevent the use of any U.S. products for atomic-weapons research by foreign powers. The academy, known as CAEP, was one of the first Chinese institutions put on the U.S. blacklist, known as the entity list, because of its nuclear work.
A Journal review of research papers published by CAEP found that at least 34 over the past decade referenced using American semiconductors in the research. They were used in a range of ways, including analyzing data and generating algorithms. Nuclear experts said that in at least seven of them, the research can have applications to maintaining nuclear stockpiles. CAEP didn’t respond to requests for comment.
The findings underline the challenge facing the Biden administration as it seeks to more aggressively counter the use of American technology by China’s military. In October, the U.S. expanded the scope of export regulations to prevent China from obtaining the most advanced American chips and chip-manufacturing tools that power artificial intelligence and supercomputers, which are increasingly important to modern warfare.
An expanded version of this report appears on WSJ.com.
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Google Parent Alphabet to Cut 12,000 Jobs Amid Wave of Tech Layoffs
Google’s parent company said it would cut its staff by 6% in its largest-ever round of layoffs, extending a retrenchment among technology companies after record pandemic hiring.
Alphabet Inc.
GOOG 5.72%
said the cuts would eliminate roughly 12,000 jobs across different units and regions, though some areas, including recruiting and projects outside of the company’s core businesses, would be more heavily affected.
The layoffs reached as high as the vice president level and affected divisions including cloud computing and Area 120, an internal business incubator that had already faced cuts last year, said people familiar with the matter.
The Google cuts make January the worst month yet in a wave of tech layoffs that began last year, according to estimates from Layoffs.fyi, which tracks media reports and company announcements. This week,
Microsoft Corp.
said it would eliminate 10,000 jobs, the largest layoffs in more than eight years. Online furniture seller
Wayfair Inc.
said it is laying off about 10% of its workforce, and
Unity Software Inc.,
which provides tools for creating videogames and other applications, also cut staff.
Earlier this month,
Amazon.com Inc.
said layoffs would affect more than 18,000 employees and
Salesforce Inc.
said it was laying off 10% of its workforce. Last year,
Meta Platforms Inc.
said it would cut 13% of staff.
Technology companies including Google expanded rapidly during the pandemic as life moved online. Recent cuts have been part of a broader pivot toward protecting profit and cementing the end of a growth-at-all costs era in technology. Google executives have in recent months said the company would be tightening its belt, reflecting a new period of more disciplined and efficient spending. But the company hadn’t announced cuts as deep as those of its Silicon Valley peers.
Google hired aggressively as demand for its services rose during the health crisis, leading to more than 50% growth in total employee count across Alphabet since the end of 2019. The cuts this week appeared to fall short of the almost 12,800 employees Alphabet added to its roster in the third quarter last year.
“Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today,” Alphabet Chief Executive
Sundar Pichai
wrote in a message to employees sent out Friday and posted on the company’s website.
“I take full responsibility for the decisions that led us here,” Mr. Pichai wrote. The corporate mea culpa for overhiring has become a recurring message in recent months at tech companies as executives realized that some of the hiring they undertook to keep pace with soaring demand for all things digital early in the pandemic left them overstaffed as the business environment soured.
Among the executives who have made such apologies are Salesforce Co-Chief Executive
Marc Benioff,
Meta Platforms CEO
Mark Zuckerberg
and Twitter Inc. co-founder
Jack Dorsey.
Alphabet recorded $17.1 billion of operating income in the third quarter last year, an 18.5% decrease from the same period in 2021. Google executives partly blamed a slowdown in revenue growth on the company’s historic performance during the tail end of the pandemic. Alphabet shares rose 4.5% to $97.24 in morning trading Friday.
Alphabet earlier this month said it would cut more than 200 jobs at its Verily Life Sciences healthcare business, accounting for about 15% of the roles at the unit. Before that, some of the last major cuts Google announced were in 2009, when the company said it was reducing the number of jobs in its sales and marketing teams by roughly 200 globally.
Activist hedge fund TCI Fund Management, which had called on Alphabet to cut costs aggressively in November, said Friday the company should go further.
“Management should aim to reduce headcount to around 150,000, which is in line with Alphabet’s headcount at the end of 2021,”
Christopher Hohn,
TCI managing director, said in a letter. “This would require a total headcount reduction in the order of 20%.”
Current and former Google employees said layoffs would likely affect the company’s famously loose and collegial culture, which has been widely imitated in the tech industry.
Google employees have long enjoyed one of the most accommodating environments among large U.S. companies. A letter to potential investors in Google’s 2004 initial public offering said the company provided many unusual benefits, such as washing machines, and would likely add more over time.
As job cuts have accumulated in the tech industry, many employees at Google have pressed executives about the possibility of layoffs at the company. At a companywide meeting in December, Mr. Pichai told employees that the company had tried to “rationalize where we can so that we are set up to better weather the storm regardless of what’s ahead.”
A Google spokesman said that Friday’s cuts would affect not just Google, but also other Alphabet subsidiaries, but didn’t specify at what levels. Alphabet subsidiaries include Verily and the Waymo self-driving-car unit. The spokesman didn’t comment on which specific products or engineering units would be affected.
“Alphabet leadership claims ‘full responsibility’ for this decision, but that is little comfort to the 12,000 workers who are now without jobs,” said Parul Koul, executive chair of the Alphabet Workers Union, in a statement. “This is egregious and unacceptable behavior by a company that made $17 billion dollars in profit last quarter alone.”
Alphabet said it would offer U.S.-based employees two months notice, plus 16 weeks of severance pay, along with two additional weeks for each year an employee being laid off from the nearly 25-year-old company has worked there. In other countries, the company will follow local processes and laws, which sometimes require consultations with employee representatives before workers are laid off.
The company will also offer former employees access to resources to help them with their immigration status, job placement and mental health, the spokesman said. Tech companies in the U.S. often have employees on work visas tied to their employment.
Write to Sam Schechner at Sam.Schechner@wsj.com and Miles Kruppa at miles.kruppa@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Mississippi-Based Furniture Company United Furniture Industries Fires 2,700 Workers Via Text and Email
Days before Thanksgiving, a Mississippi-based furniture company laid off 2,700 workers across the country—via text and email—while many of them were sleeping.
United Furniture Industries sacked nearly its entire workforce in the state, as well as employees in North Carolina and California, and in a heartless parting blow, discontinued the employees’ health-care benefits, according to reports. After the mass layoffs, one company driver was arrested for allegedly stealing furniture and a truck.
Now the firm is facing at least three federal lawsuits in the Northern District of Mississippi. Toria Neal, who has worked for the company since July 2014, filed a class-action suit this week alleging United fired all employees except for “over-the-road drivers” just before midnight on Nov. 21 in violation of federal law. She argues United didn’t give workers a required 60-day advance written notice. (Two other employees, Frances Alomari and Willie Poe, filed lawsuits making the same allegations against the company.)
The abrupt firings were a punch to the gut for longtime employees of United Furniture, which operates under the Lane Furniture brand.
Jimmy Herring, 24, told The Daily Beast that he was promoted to floor supervisor at a Lane plant in Trinity, North Carolina, a week or two before his termination. Herring said that before he and his colleagues were let go, they were making recliners for Lowe’s retail stores.
But at 11:56 p.m. on Monday, the firm sent him a text message while he was asleep. He wouldn’t see the digital pink slip until a day or two later.
Jimmy Herring and his girlfriend, Chey, are expecting a baby on Dec. 8.
Courtesy of Jimmy Herring
Instead, his boss texted him the next morning, without providing many details, and announced they didn’t have work. At first, Herring assumed they were getting a day off because of the upcoming holiday. Then he contacted his co-workers.
“They said we had all been terminated,” said Herring, who was with the company for six years. “I thought it was a joke or something.”
He said his reaction was one of “complete panic.”
“I didn’t know what to do, where to start,” said Herring, whose girlfriend, Chey, is expecting a baby on Dec. 8. Instead of shelling out for Thanksgiving dinner, the couple scrambled to buy supplies for their future child including a baby bath.
Herring is unsure if last Friday’s paycheck from Lane will be his last.
“Some people don’t even have cellphones,” Herring added of co-workers. “They had to go to the plant and find out they don’t have a job anymore.”
Multiple employees and their relatives took to Facebook to fume over the dismissals.
“Pathetic!! My brother who is 64 years old was sent a text to say you no longer have a job!” one North Carolina resident wrote. “I hope these ppl have to endure the same treatment my brother and the rest of these employees will have to face now, especially being the start of the holidays!!!”
“Fantastic business ethics United/Lane,” wrote TJ Martin, an employee of a Tupelo, Mississippi plant who also spoke to local news station WLBT. “We appreciate the termination news while on vacation and at 11:30pm at night.”
“I have spoken with numerous co-workers,” Martin added, “and we all completely feel let down by a company we have dedicated our time and energy to for years and loved doing so in order to provide for our families.”
Trade publication Furniture Today published United’s message to staff.
“At the instruction of the Board of Directors of United Furniture Industries, Inc., and all subsidiaries (the “Company”), we regret to inform you that due to unforeseen business circumstances the Company has been forced to make the difficult decision to terminate the employment of all its employees, effective immediately, on November 21, 2022, with the exception of over-the-road drivers that are out on delivery,” the firing notice stated. “Your layoff from the Company is expected to be permanent and all benefits will be terminated immediately without provision of COBRA.”
“We regret that this difficult and unexpected situation has made this necessary,” United continued, adding: “Thank you for your service and dedication.”
Last summer, the company fired its CEO, CFO and executive vice president of sales and laid off 300 employees, Furniture Today revealed. The firm then named Todd Evans as its new CEO. “Our industry is experiencing a drastic decrease in consumer demand,” Evans said in July. “Our inventory levels remain high and new orders from our customers remain slow.”
United Furniture Industries has yet to comment on the firings.
Ikea sends lawyers after indie dev for making a horror game about a furniture store
Ikea has issued a cease and desist demand to an indie horror developer insisting they change their unreleased horror game in a bid to stop press and players alike from comparing it to its global furniture chain.
The Store is Closed – which we told you about a couple of weeks ago – is a haunting mash-up of Endnight Games’ The Forest (which incidentally saw its sequel, Sons of the Forest, recently delayed) and the humdrum of everyday life, and comes from indie developer Ziggy.
Whilst it doesn’t use any of Ikea’s products, names, or branding, Ikea believes the developer is infringing on its copyright and has sent in New York legal firm Fross Zelnick. Consequently, Ziggy – who’s based in the UK – has ten days to make the changes or face legal action.
“IKEA’s lawyers contacted me about The Store is Closed,” Ziggy tweeted, linking to an article on Kotaku.
“I was going to spend the last week of my Kickstarter preparing an update for all the new alpha testers. But now I’ve got to desperately revamp the entire look of the game so I don’t get sued.”
When asked if he’d intentionally designed the store or its contents with Ikea “in mind”, Ziggy said: “I bought generic furniture asset packs to make this game”.
Ikea isn’t convinced, though.
“Your game uses a blue and yellow sign with a Scandinavian name on the store, a blue box-like building, yellow vertical stiped shirts identical to those worn by Ikea personnel, a gray path on the floor, furniture that looks like Ikea furniture, and product signage that looks like Ikea signage,” the legal paperwork insists. “All the foregoing immediately suggest that the game takes place in an Ikea store.”
The lawyers also take issue that even when gaming press haven’t made direct connections to Ikea, readers have: “Further, numerous comments by readers of these stories make an association with Ikea stores,” the letter says.
For those keen to learn more about The Store is Closed, Ziggy has set up a Kickstarter page, with it slated to release for PC, Xbox Series X S and PS5. You can wishlist it now on Steam.
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Taylor Swift and boyfriend Joe Alwyn go furniture shopping in NYC days before album release
Taylor Swift looked happier than ever as she was seen on a rare public outing with boyfriend Joe Alwyn in New York City on Monday.
The singer, 32, who has been dating British actor Joe, 31, since 2016, smiled as she chatted with her beau, while putting on a leggy display in a printed mini dress and patterned tights.
The Trouble hitmaker displayed her stellar fall style as she paired her ensemble with an oversize sweater and a tan satchel while furniture shopping at Artifacts 20th Century.
Rare sighting: Taylor Swift looked happier than ever as she was seen on a rare public outing with boyfriend Joe Alwyn in New York City on Monday
Her tresses were worn sleek and straight and she sported a radiant palette of make-up.
Conversations With Friends star Joe wore an emerald green sweater and baggy jeans as he strolled alongside his love.
Taylor and Joe’s public outing comes just days before the release of her 10th studio album, Midnights on October 21 – with the star recently revealing track, Lavender Haze, was written about her love for Joe.
Speaking on her TikTok series, Midnights, Mayhem & Me, she said: ‘I happened upon the phrase ‘lavender haze’ when I was watching Mad Men.
Evermore: The singer, 32, who has been dating British actor Joe, 31, since 2016, smiled as she chatted with her beau, while putting on a leggy display in a printed mini dress and patterned tights
‘I looked it up because I thought it sounded cool, and it turns out that it’s a common phrase used in the ’50s where they would describe being in love.
‘I guess theoretically, when you’re in the lavender haze, you’ll do anything to stay there and not let people bring you down off of that cloud.
‘I think a lot of people have to deal with this now, not just ‘public figures,’ because we live in the era of social media. If the world finds out that you’re in love with somebody, they’re going to weigh in on it.’
‘Like, my relationship for six years, we’ve had to dodge weird rumors, tabloid stuff — and we just ignore it. This song is sort of about the act of ignoring that stuff to protect the real stuff.
At the start of July it was reported that Taylor had been engaged to her boyfriend for a ‘few months.’
The Sun claimed that the singer has been wearing an engagement ring ‘behind closed doors’ and that the couple have only informed their close friends of the news.
Love Story: The Trouble hitmaker displayed her stellar fall style as she paired her ensemble with an oversize sweater and a tan satchel while furniture shopping
Taylor began dating Joe in late 2016 after they were rumored to have crossed paths at that year’s Met Gala in New York City.
DailyMail.com reached out to Taylor’s representatives for comment at the time.
‘Taylor and Joe are incredibly happy, and very, very in love,’ a source claiming to be close to Joe told the outlet at the start of July.
‘They’ve actually been engaged for a few months but have only told their inner-inner circle — basically immediate family, and trusted, very old friends.
‘Everyone has been sworn to secrecy, too.’
The insider alleged that Joe presented Taylor with a ‘beautiful ring’ but ‘she only wears it when she’s at home’, i.e., behind closed doors.
‘Again, only a handful of people know details about the wedding and Taylor hasn’t even told some of her team about the engagement,’ they claimed.
Her London Boy: Conversations With Friends star Joe wore an emerald green sweater and baggy jeans as he strolled alongside his love
The source also told The Sun that Taylor and Joe ‘want their love to stay away from the cameras as much as possible’ and that their alleged engagement is ‘just for them.
‘And if and when they do exchange vows, there most definitely won’t be any Vogue, Rolling Stone or Hello! magazines there. It will be simple and elegant — like them.’
According to the outlet, there are ‘no specific wedding details’ and it is unknown if the couple will officially announce the alleged engagement.
The Lover singer reportedly kicked off her romance with Joe just months after her shock split from Loki actor, Tom Hiddleston, in September 2016.
Taylor gave fans insight into their burgeoning romance by alluding to Joe in lyrics on her hit 2017 album Reputation, including the song Gorgeous where she recalls ‘making fun of’ his English accent.
New music: Taylor and Joe’s public outing comes just days before the release of her 10th studio album, Midnights – with the star recently revealing track, Lavender Haze, was written about her love for Joe
Style: One of the star’s companions was seen loading a stylish chair into a van
The Grammy Award-winner opened up even more on her 2019 album Lover, where she gushed about her ‘London boy’ on multiple tracks.
The song Cruel Summer is also rumored to be about the overlap between the beginning of her romance with Joe and the end of her fling with Hiddleston.
Joe told The Sunday Times in 2018 that he finds it ‘flattering’ that Taylor uses him as her musical muse.
Just two years later, Taylor welcomed her beau into the songwriting world by allowing him to pen lyrics for her 2020 alum, Folklore.
Using the pseudonym ‘William Bowery,’ Joe co-wrote two songs for the Grammy Award-winning album and three more songs for Folklore’s sister record Evermore.
Although she feels safe opening up in her music, Taylor previously stated that her relationship with the British hunk ‘isn’t up for discussion’ in the press.
She discussed the decision to keep their romance ‘private’ in her 2020 Netflix documentary Miss Americana, which included rare footage of herself and Joe.
Taylor has dated a number of high-profile men over the course of her young life, including pop rocker Harry Styles, actor Jake Gyllenhaal, DJ Calvin Harris, singer Joe Jonas and rock heartthrob John Mayer.
‘We have to protect the real stuff’: Taylor recently revealed she ignores ‘weird rumours’ about her relationship with boyfriend Joe
The star has recently submitted herself in 13 categories for the 2023 Grammy Awards, due to be held on February 5.
She has received a total of 42 Grammy nominations thus far, winning 11, including three Album of the Year gongs.
Variety reports Taylor has submitted herself in Album of the Year and Best Country Album for Red (Taylor’s Version), Record of the Year, Song of the Year and Best Pop Solo Performance for All Too Well (10 Minute Version), Best Pop/Duo Group Performance for Nothing New and The Joker & The Queen, Best Country Song and Best Country Solo Performance for I Bet You Think About Me, Best American Roots Song, Best American Roots Performance and Best Song Written For Visual Media for Carolina, and Best Music Video for All Too Well: The Short Film.
Red (Taylor’s Version) was submitted for Best Engineered Album (Non-Classical)
The singer has been nominated for 42 Grammys throughout her career and she has won 11 awards, including three Album of the Year wins.
Will she do it again? The star has recently submitted herself in 13 categories for the 2023 Grammy Awards, due to be held on February 5 (pictured at the 2010 Grammys)
He nailed three big S&P 500 moves this year. Here’s where this strategist sees stocks headed next, with beaten down names to buy.
A Wall Street hat trick may not be on the cards, with stocks in the red for Wednesday.
A two-day rally was never a guaranteed exit out of the bear woods anyway, as some say signs of a durable bottom are still missing.
Enter our call of the day, from the chief market technician at TheoTrade, Jeffrey Bierman, who has made a string of prescient calls on what has been a roller coaster year for the index thus far. He’s also a professor of finance at Loyola University Chicago and DePaul University.
Bierman, who uses quant and fundamental analysis to determine market direction, sees the S&P 500
SPX,
-1.62%
finishing the year between 4,000 and 4,200, maybe around 4,135. “Fourth-quarter seasonality favors bulls following a weak third quarter. Not to mention most stocks are priced for no growth,” he told MarketWatch in a Monday interview.
In December 2021, he forecast the S&P 500 might see a 20% decline within six months, toward 3,900 — it hit 3,930 in early May. In June, he forecast a rally and recovery to 4,300 — the index hit 4,315 by mid-August.
Speaking to MarketWatch on Aug. 25, Bierman saw a retest of around 3,600 for the index, citing an often rough September for stocks. It closed out last month at a new 2022 low of 3,585.
“I think we’re going to end up for the quarter. [The market is] deeply oversold and some stocks are completely mispriced in terms of their valuation metrics,” said Bierman, who is looking squarely at retail and technology sectors.
“The valuations on half the chip stocks are trading below a multiple of seven. I’ve never seen that ever…but what that means is when the semiconductor sector comes back, the multiple expansion is gonna be like a volcanic eruption to the upside,” he said of the sector known for its boom/bust cycles.
For example, he owns Intel
INTC,
-2.53%,
which hit a five-year low on Friday. Eventually, the company that has invested $20 billion in a new U.S. plant will come roaring back alongside rivals like Advanced Micro
AMD,
-4.65%.
“People will look back on this and go ‘Oh, my God, I can’t believe Intel was at five times earnings,’ which is insanity for this stock.”
For the S&P 500 as a whole next twelve months price/earnings is currently 16.13 times, so Intel’s would be less than half of the broader index, according to FactSet
As for retail, he’s been looking at Urban Outfitters
URBN,
-1.06%,
Macy’s
M,
-1.94%
and Nordstrom
JWN,
-0.67%,
all places where millennials don’t shop, but the middle class does, with the all-important holiday shopping period dead ahead.
“There are 100,000 people being hired to work part time at these companies, and their margins are not coming down at all,” with no markdowns and decent sales, he said, noting those companies are being priced at a multiple of 5 times forward earnings.
“It means that you don’t think that Macy’s can put together for the Christmas quarter a comparative quarter, year over year of greater than 5%? If you don’t then don’t buy it, but I do,” said Bierman. “That’s why I’m willing to stick my neck out and buy these things. I bought Abercrombie & Fitch
ANF,
-3.78%
at 10 times earnings…I’ve never seen it that low.”
For those who aren’t comfortable picking stocks, he says they can still get exposure through exchange-traded funds, such as SPDR S&P Retail
XRT,
-2.58%
or the Technology Select Sector SPDR ETF
XLK,
-1.70%.
Bierman adds that investors need to be careful not to be overly concentrated in the top stocks, given “10 stocks accounted for 45% of the Nasdaq and the fact that 25% of the S&P almost accounted for about 50% of the S&P movement.”
“Everbody’s concentrated in 10 stocks that can still fall another 30% or 40%, like Apple and Microsoft. The idea of concentration risk is that everybody owns Apple, everybody owns Amazon,” he said.
And that could force the hand of passive and active managers heavily invested in those big names, driving a 10% drop for markets that “washes away all other stocks.”
The markets
Stocks
DJIA,
-1.21%
SPX,
-1.62%
COMP,
-2.19%
are in the red, and bond yields
TMUBMUSD10Y,
3.783%
TMUBMUSD02Y,
4.199%
are up, along with the dollar
DXYN,
.
Silver
SI00,
-5.00%
is retracing some of this week’s big gains, and bitcoin
BTCUSD,
-2.62%
is also off, trading at just over $20,000. Hong Kong stocks
HSI,
+5.90%
surged 6% in a catch-up move following a holiday. New Zealand’s central bank hiked rates a half point, the fifth increase in a row.
The buzz
Oil prices
CL.1,
-0.02%
BRN00,
+0.28%
are flat as OPEC+ reportedly agreed to cut oil production by 2 million barrels a day. Some say don’t be too impressed by any output reduction.
Amazon
AMZN,
-2.34%
will reportedly freeze corporate hires in its retail business for the remainder of 2022.
Mortgage applications fell to the lowest pace in 25 years in the latest week.
The ADP private-sector payrolls report showed 208,000 jobs added in September. The trade deficit narrowed, which should be good news for third-quarter GDP. The Institute for Supply Management’s services index is due at 10 a.m. Atlanta Fed President Raphael Bostic will also speak.
Expect the spotlight to stay on Twitter
TWTR,
-2.53%
after Tesla
TSLA,
-5.16%
CEO Elon Musk committed to the $44 billion deal. But will it feel like a win once he owns it?
Plus: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues
EU countries agreed to impose new sanctions on Russia after the illegal annexation of four Ukraine regions. Those moves will include an expected price cap on Russian oil.
South Korea’s missile fired in response to North Korea’s weapon launch over Japan, crashed and burned.
Best of the web
Russians fleeing Putin’s mobilization are finding haven in poor, remote countries.
Consumers are throwing away perfectly good food because of ‘best before’ labels.
The CEO of an election software company has been arrested on accusations of ID theft.
Top tickers
These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern:
| Ticker | Security name |
|
TSLA, -5.16% |
Tesla |
|
GME, -7.59% |
GameStop |
|
AMC, -9.56% |
AMC Entertainment |
|
TWTR, -2.53% |
|
|
NIO, -5.92% |
NIO |
|
AAPL, -1.77% |
Apple |
|
APE, -8.40% |
AMC Entertainment preferred shares |
|
BBBY, -8.52% |
Bed Bath & Beyond |
|
AMZN, -2.34% |
Amazon |
|
DWAC, -0.64% |
Digital World Acquisition Corp. |
The chart
More market-bottom talk:
Random reads
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An iPhone in a 162-year old painting? The internet is stumped.
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Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton
Mark Zuckerberg issues dire economic warning to Meta employees
Mark Zuckerberg has issued a chilling message to Meta Platforms Inc. employees: The company faces one of the “worst downturns that we’ve seen in recent history” that will necessitate a scaling back in hires and resources.
The dire economic warning was delivered during an internal videoconference meeting on Thursday for Meta’s
META,
-0.76%
77,800 workers, according to a New York Times report. To underscore the ominous message, Zuckerberg told employees to expect to do more with fewer resources and that their performance would be more intensely graded.
“I think some of you might decide that this place isn’t for you, and that self-selection is OK with me,” Zuckerberg said on a call, according to the Times. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
Buttressing Zuckerberg’s comments, Meta Chief Product Officer Chris Cox said in a separate memo that Meta faces “serious times” and economic “headwinds are fierce.”
The most obvious manifestation will be fewer hires — Facebook’s parent company now intends to add 6,000 to 7,000 engineers this year, down from an initial goal of 10,000, the Times reported. A former Facebook employee confirmed to MarketWatch that the Silicon Valley company has significantly reduced its hiring plans in recent months.
Meta’s advertising business has been badly battered by a change in privacy settings to Apple Inc.’s
AAPL,
+1.62%
mobile operating system, limiting the amount of user data that can be collected by Facebook and Instagram. Consequently, Meta has posted two straight quarterly profit declines for the first time in a decade. Meta lost some $230 billion in market value — its worst one-day hit ever — after it posted desultory results in February.
At the same time, Meta is pursuing a risky strategic pivot to the immersive world of the metaverse, which prompted the company’s name change last year.
Meta is one of several tech companies facing choppy economic waters as it navigates through inflation, a war in Ukraine, and supply-chain issues. In recent days, Tesla Inc.
TSLA,
+1.24%,
Netflix Inc.
NFLX,
+2.91%,
Unity Software Inc.
U,
+1.96%,
Coinbase Global Inc.
COIN,
+4.30%,
Stitch Fix Inc.
SFIX,
-0.81%,
Redfin Corp.
RDFN,
+8.74%
have announced deep job cuts.
Meanwhile, Twitter Inc.
TWTR,
+2.25%,
Intel Corp.
INTC,
-2.86%,
and others have announced hiring freezes.
Best Buy adds beauty gadgets and outdoor furniture to product lineup
Electric bikes. Patio furniture. Beauty gadgets.
Best Buy is adding merchandise that might surprise shoppers who typically think of its stores and website as a place to buy smartphones, laptops and TVs.
The company said Friday it has begun to carry about 100 skin-care devices, including a facial steamer and at-home tool for microdermabrasion, at nearly 300 stores and on its website.
Best Buy is making a broader push into categories such as fitness and furniture as it looks to propel growth beyond the Covid pandemic. The company benefited from early pandemic trends, as people sought computer monitors for home offices, kitchen appliances for more at-home cooking and theater systems or giant TVs to pass the time.
Now, however, the retailer faces a more challenging landscape. It cautioned in March that it expects a same-store sales decline of between 1% and 4% in the coming year after a period of very high demand.
There are already signs of softening electronics sales, as consumers direct dollars toward vacations and social events. Major appliance maker Whirlpool missed on estimates and saw sales drop 8.3% in North America in the most recent quarter versus the year-ago period, the sharpest decline since the pandemic began. Microsoft, which produces Xbox video game consoles, gave a negative outlook for the coming quarter with projected declines in the gaming category.
The NPD Group, a market researcher, projected that revenue from consumer electronics in the U.S. will fall by 5% in 2022, 4% in 2023 and 1% in 2024 — but said total sales will remain higher than pre-pandemic levels. The declines follow a record-setting year for the industry in the U.S. with consumer tech sales hitting almost $127 billion, a 9% jump over the elevated sales in 2020, NPD Group said.
Read more: Surging prices force consumers to ask: Can I live without it?
Some of the new items cater to consumers’ going out and getting social again — such as electric scooters, according to Best Buy’s chief merchandising officer, Jason Bonfig.
The retailer has expanded its merchandise offering in recent years. Best Buy debuted connected fitness products from exercise brands including NordicTrack and Hydrow in summer 2019. It rolled out outdoor grills from Weber and Traeger in June and a line of electric bikes, scooters and mopeds in August. It acquired Yardbird, a direct-to-consumer outdoor furniture company, for an undisclosed sum in November.
Best Buy has also bought health-care companies, including GreatCall, which sell devices and services that help older adults age in their own homes. It is testing services related to new products, too, such as a pilot program to offer repair services for e-transportation products.
Bonfig said in an interview with CNBC that the company has taken cues from customer and employee feedback — and clicks and searches on its website. For instance, he said, some shoppers would ask employees about outdoor furniture when buying a TV or audio equipment for the backyard.
“Our answer in the past has been ‘No, we actually don’t have an assortment of that,'” he said.
Now, with Yardbird, it does. This month, Best Buy added displays at one of its namesake stores and a handful of locations under the Best Buy subsidiary, Pacific Sales Kitchen & Home in Southern California. Customers can also buy outdoor sofas, wicker chairs and more on Best Buy’s website.
This year, the retailer plans to add Yardbird and e-transportation displays to about 90 stores, nearly 10% of its approximately 1,000 U.S. store footprint. More than 250 of its stores currently have fitness equipment and Best Buy plans to add a larger, more premium experience for those products in about 90 stores.
Best Buy does not break out revenue by merchandise category, but emerging areas have been a powerful driver of sales, the company has said. At an investor day in March, Bonfig said most of Best Buy’s over $12 billion in sales growth in the past decade has come from large established products like computing, TV and appliance, but one-third has come from newer groups such as wearables and virtual reality headsets.
Bonfig declined to tell CNBC specific growth numbers, but said the younger categories are resonating. And he said one of the skin-care devices it started to offer, the TheraFace Pro, has been a “breakout hit.” It sells for about $400, with features for cleansing and infrared light therapy. He said the products cater to consumers’ interest in health and wellness.
Michael Baker, an equity research analyst for retail at D.A. Davidson, said adding merchandise groups fits with the company’s history. With the moves, he said Best Buy can stay on the leading edge, expand its total addressable market and capture a larger share of consumers’ disposable income.
His price target for the company is $135, about 46% above where shares are currently trading.
The biggest risk, he said, is Best Buy could buy the merchandise only to see it linger and wind up marked down.
Baker said moderating sales may free up time and allow Best Buy to get creative in how it merchandises and promotes different kinds of items.
“There was such a focus on being able to fulfill demand for work from home, learn from home, play from home type products,” he said. “With those slowing, it gives them a chance to see where they can go from here.”
Bausch + Lomb Prices IPO at $18 a Share, Below Expectations
Bausch + Lomb Corp. priced its IPO at $18 a share Thursday, falling short of expectations as it became the first big company in months to try going public into a turbulent stock market.
Bausch Health
BHC -7.40%
Cos., the parent company, raised $630 million in the offering. It had been aiming to raise as much as $840 million and sell the stock at $21 to $24 a share, according to a regulatory filing. The Wall Street Journal had previously reported the deal was likely to price at the low end or below the range.
The debut of the eye-care company, a spinoff of Bausch Health Cos., is being watched closely as a bellwether for the IPO market, which has been virtually shut down since stocks started falling earlier this year. It is the first big initial public offering since private-equity firm
TPG Inc.
went public in mid-January. After a record year in 2021, traditional IPOs have raised less than $3.3 billion in 2022, the slowest start since 2016, according to Dealogic.
Bausch is a fitting test case for the IPO market, which provides a crucial spigot of cash and visibility to startups and Wall Street alike. The company is profitable and a well-established name in its industry.
“It’s a real critical week for the IPO market,” said
Jeff Zell,
senior research analyst at IPO Boutique. With so few IPOs so far this year, “It’s extremely important that this one not only gets out on the right foot but trades steady in the aftermarket,” he said.
Among those who will be watching closely are others on the IPO runway. Fund managers say they have met this year with executives at companies including
Intel Corp.’s
$50 billion-or-more self-driving car unit Mobileye and Steinway Musical Instruments Holdings Inc., which have said they are pursuing IPOs. Other companies considering listings later this year include ServiceTitan Inc. and Quick Quack Car Wash Holdings LLC, according to people familiar with the matter.
It doesn’t help that markets have whipsawed lately, with the technology-stock-heavy Nasdaq Composite up more than 3% Wednesday and down 5% Thursday. The index has moved at least 1% in either direction in 11 of the past 13 trading sessions.
Traditionally, volatility has been considered the most crucial indicator for the IPO market. When a company launches its IPO, the management team and its advisers spend several days on a so-called roadshow, meeting with fund managers to entice them to buy the stock. A volatile market, with little visibility into the next day let alone week, makes that tricky.
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There has been another, less well-appreciated factor gumming up the gears of the new-issue market, bankers say. Correlation between individual stocks in the S&P 500 has risen dramatically in recent months as fears that rising interest rates could spark a recession lead to across-the-board selling. That makes it harder for stock pickers, and makes IPOs less attractive, some analysts say. Fund managers expect outperformance from IPOs, and if stocks are nearly all moving in unison, the odds of achieving that become longer.
Over the three months before technology stocks started falling in December on inflation and interest rate fears, the average stock moved in the same direction as the S&P 500 39% of the time, according to Ned Davis Research. Since then, that has jumped to 61%.
Some fund managers welcome the air coming out of the IPO market.
Jonathan Coleman
at Janus Henderson Investors, who oversees more than $14 billion across two funds, said last year the IPO market got so heated, it became hard to receive meaningful allocations in offerings. In the past, Mr. Coleman said he thought the market was frothy when there were orders for 10 times the number of shares available in an average offering. In late 2020 through late 2021, order books were routinely 30- to 40-times oversubscribed, he said.
“My experience is, if we’re lamenting the lack of IPOs now, we’ll be lamenting the flood when the windows open back up,” he said.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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