Musk Twitter Deal in Jeopardy
Plus, GameStop's mass layoffs.
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Musk Twitter Deal in Jeopardy
Shares of Twitter (NYSE: TWTR) dropped 3.92% in after-hours trading on Thursday due to two reports that indicate major financial problems with the social media company.
No Musk, No Deal: Elon Musk’s deal to buy Twitter is in peril, according to a report from The Washington Post. Three people familiar with the matter say that Musk is concerned about Twitter’s spam accounts. Twitter has not confirmed the report yet.
Layoffs: Twitter has joined the growing list of technology companies laying off staff. The Wall Street Journal reported Thursday that Twitter has laid off 30% of its talent acquisition team. Twitter has not confirmed the report yet. The company announced in May that it would pause hiring.
Background: The layoffs are likely a consequence of the Musk deal falling apart. Ever since Musk announced his intention to buy Twitter, there have been rumors that he actually won’t take the deal. If Musk backs out, he’ll owe $1 billion in a breakup fee.
Numbers: Twitter’s stock dropped 9% this year and has been up and down throughout that time. When the Musk deal looked good, the stock jumped. Whenever the deal fell apart, the stock dropped.
Final Thoughts: Most people expected Musk to back out of the deal. The spam account story was set up for him to either leave the deal or try to lower the asking price. As for investors, Twitter doesn’t look too appetizing now.
Notable Earnings Today: N/A.
Notable IPOs Today: N/A.
Notable Equity Crowdfunding Campaigns Ending Today: CTXMarket (TruCrowd), 2nd Skull (StartEngine), Redivivus (StartEngine), XR Casino (StartEngine), Givsly (SeedInvest), Tipsy Cupcakes (MainVest).
Notable Economic Events Today: Unemployment Rate (8:30 a.m. ET), Nonfarm Payrolls (8:30 a.m. ET), Average Hourly Earnings (8:30 a.m. ET), Labor Force Participation Rate (8:30 a.m. ET).
GameStop Fires CFO, Mass Layoffs Coming
Shares of GameStop (NYSE: GME) dropped 5.61% in after-hours trading on Thursday after the video game retailer announced some staff changes.
CFO Change: GameStop announced the sudden termination of CFO Michael Recupero. He will be replaced by Diana Saadeh-Jajeh, who is currently the chief accounting officer. Recupero was “fired because he was not the right culture fit” and was “too hands off,” according to a report from CNBC.
Layoffs: GameStop will also lay off “a number of” employees in order to become profitable, according to a memo from CEO Matt Furlong that was obtained by Axios. The cuts come after the company hired 600 workers since 2021. GameStop did not verify the memo.
Background: The departure of the CFO comes one day after the company announced a 4 for-1 stock split, which resulted in a jump in stock price. Now, the layoff news has resulted in a drop in the stock price.
Final Thoughts: GameStop, the poster child of the meme stock rally, has struggled to become profitable. Can the company turn this around?
Equity Crowdfunding Spotlight: Fast Penny Spirits
Briefly describe your business. Fast Penny Spirits is an amaro distillery and B Corp producing Amaricano and Amaricano Bianca. Blended with over 45 of the highest quality, organic, and sustainably sourced botanicals, their amari are rich, herbaceous, and captivating.
What are the terms of the investment for your campaign? Starting at $250. Visit our StartEngine campaign page to learn more.
What makes your startup special? Why will it succeed? We believe we have been able to prove that businesses can make a positive impact socially and still be successful. Our spirits are an extension of our ethos, and the quality they offer can only be produced by using a selection of the best ingredients.
Trends to Watch
Wall Street Bets: Reddit Launches Polygon-Based 'Collectible Avatar' Marketplace (CoinDesk)
Goodbye, Inflation: Levi Strauss stock up after retailer's Q2 earnings top views, online sales rise (MarketWatch)
Disrupted: Nu Skin Enterprises cuts Q2 revenue guidance on global headwinds (Seeking Alpha)
Can We Say Bullish: Rialto Markets CEO Shari Noonan: “Private securities market will grow from $7 trillion in 2021 to $30 trillion in 2030” (Crowdfund Insider)
Delayed: Spirit Airlines again puts off a vote on Frontier’s offer as it mulls JetBlue’s (The New York Times)
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