US Equities Digest (Friday, 28 June - Sunday, 30 June 2024)
Find updates of the following companies in the news in today's post: Alaska Air Group Inc, Alphabet Inc, Amazon Inc, Apple Inc, Boeing Co, Citigroup Inc, Goldman Sachs Group Inc, HubSpot Inc, Meta Platforms Inc, Microsoft Corporation, Nike Inc, Tesla Inc, and Webtoon Entertainment Inc:
Alaska Air Group Inc (NYSE: ALK)
29 Jun 2024: Alaska Airlines announced on Friday that it has returned the 737 MAX 9 aircraft involved in a midair door panel blowout in January to Boeing (NYSE: BA) and has placed an order for a new 737-10. Boeing has informed its suppliers of a three-month delay in a key production milestone for the 737 jet family and issued an apology after being sanctioned by US investigators for disclosing details of the blowout probe.
Alphabet Inc (NASDAQ: GOOG, NASDAQ: GOOGL)
28 Jun 2024: Italy is demanding Google pay 1 billion euros in unpaid taxes and penalties, stemming from claims that the company failed to declare and pay taxes on revenue generated in Italy between 2018 and 2022. The current investigation, which began in December 2022, focuses on Google's digital infrastructure within Italy, similar to a recent tax settlement with Netflix (NASDAQ: NFLX), and may lead to broader implications for other multinational web companies under scrutiny.
Amazon Inc (NASDAQ: AMZN)
28 Jun 2024: Amazon plans to launch its first internet-from-space satellites in the 4th quarter of this year, with initial customer tests of its Project Kuiper network set for 2025. The commercial service, expected to start later in 2025, aims to provide broadband internet from over 3,000 satellites, competing with Elon Musk’s Starlink network.
29 Jun 2024: Amazon has recruited the co-founders and several team members of AI startup Adept, mirroring a similar move by Microsoft (NASDAQ: MSFT) to strengthen its position in AI. Adept, which will continue to operate independently, has appointed a new CEO, while Amazon plans to use its technology to enhance its AI capabilities and compete with leaders like Microsoft-backed OpenAI and Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL).
Apple Inc (NASDAQ: AAPL)
28 Jun 2024: In May, Apple's iPhone shipments in China increased by 40%, although growth slowed from the previous month despite significant retailer discounts ahead of June's shopping festival. Foreign smartphone brands, mainly Apple, saw shipments rise almost four times faster than the overall market, with Apple rebounding since March due to price cuts, but still facing competition from Huawei, which is nearing a billion active devices with its own operating system.
Boeing Co (NYSE: BA)
28 Jun 2024: NASA announced it is continuing to assess the Starliner's propulsion system with Boeing, delaying its return from the ISS beyond the previously scheduled date of 26 June. This additional postponement allows for further review of technical issues encountered, with the Starliner aiming to become a secondary spacecraft for transporting astronauts to the ISS alongside SpaceX's Crew Dragon.
29 Jun 2024: Boeing's Starliner spacecraft will delay returning its two astronauts from the International Space Station, as engineers need "a couple of weeks" to test and investigate the spacecraft's thruster issues, according to a NASA official on Friday.
29 Jun 2024: Boeing's aggressive cost-cutting pressure on suppliers has harmed its supply chain, contributing to current production problems, according to union leader Jon Holden. The union is seeking significant wage increases, better job security, and quality management bargaining rights in upcoming contract negotiations, highlighting their leverage with a potential strike vote planned for July.
30 Jun 2024: US prosecutors are considering criminal charges against Boeing after determining the company breached a 2021 deferred prosecution agreement (DPA) related to two fatal 737 MAX crashes in 2018 and 2019. As the 7 July deadline approaches, discussions between the Justice Department, Boeing, and victims’ relatives continue, with officials seeking input from the families and evaluating Boeing's compliance with the DPA.
Citigroup Inc (NYSE: C)
28 Jun 2024: Citigroup has requested a judge to dismiss a lawsuit filed by former managing director Kathleen Martin, who alleged she was fired for refusing to provide false information to regulators. The bank stated that Martin was lawfully terminated due to her inadequate leadership and engagement skills, and that her claims about data governance were untrue and not protected under federal whistleblowing law.
Goldman Sachs Group Inc (NYSE: GS)
28 Jun 2024: Goldman Sachs is preparing for a more challenging era in private equity, focusing on improving earnings growth rather than relying on financial engineering and market conditions. To support this shift, they have hired Darius Adamczyk, former CEO of Honeywell (NASDAQ: HON), to enhance the operations of their portfolio companies, marking a significant change in their investment strategy.
HubSpot Inc (NYSE: HUBS)
29 Jun 2024: HubSpot reported a cybersecurity incident on 22nd June, where unauthorised actors attempted to access a limited number of customer accounts, impacting fewer than 50 accounts. The company assured that there had been no new hacking attempts in the last 24 hours and is actively working to protect customer data.
Meta Platforms Inc (NASDAQ: META)
28 Jun 2024: A U.S. appeals court has revived a proposed class action by software engineer Purushothaman Rajaram, alleging that Meta Platforms discriminated against American workers in favour of lower-paid foreign employees. The 9th U.S. Circuit Court of Appeals' decision, which diverges from a previous 5th Circuit ruling, could lead to more lawsuits challenging such discrimination in the tech industry, potentially escalating to the U.S. Supreme Court if Meta appeals.
28 Jun 2024: Meta may block news content in Australia if required to pay licensing fees, according to regional policy director Mia Garlick. This follows a similar approach in Canada, and while deals with Australian media will not be renewed beyond 2024, the decision rests with Australia's assistant treasurer.
Microsoft Corporation (NASDAQ: MSFT)
28 Jun 2024: Russian hackers infiltrated Microsoft's systems earlier this year, accessing both staff and customer emails, the company revealed, months after initially disclosing the breach. This incident, alongside a separate Chinese hack, has led to increased regulatory scrutiny and a Congressional hearing, where Microsoft committed to improving its security measures.
28 Jun 2024: Microsoft's US$13 billion investment in OpenAI faces scrutiny from EU antitrust regulators, who will question rivals about OpenAI's exclusive use of Microsoft's cloud technology. Although the EU antitrust chief will not investigate the deal under merger rules, regulators are concerned about the exclusivity clauses' potential negative effects on competition, which could lead to formal investigations and possible fines.
Nike Inc (NYSE: NKE)
28 Jun 2024: Nike has forecasted a surprising decline in fiscal 2025 sales (to be down in the mid-single digits compared with estimates of a 0.91% increase) following disappointing fourth-quarter results (where revenue fell by 1.71% to US$12.61 billon, lower than analysts' average estimate of US$12.84 billion), highlighting the company's shrinking market share and faltering direct-to-consumer strategy. Shares fell by 12% in extended trading, with first-quarter revenue expected to drop by 10% compared to expectations of a 3.16% decline due to weakening demand and increased competition from brands like On and Deckers’ (NYSE: DECK) Hoka.
Tesla Inc (NASDAQ: TSLA)
28 Jun 2024: Tesla asserts that Elon Musk's US$56 billion pay package should be upheld as shareholders voted in favour of it, despite a judge's earlier decision to rescind it. The company argues that the judge's final order should favour the defendants, while shareholders' lawyers seek billions in legal fees, with the case's outcome potentially influenced by the recent shareholder vote.
28 Jun 2024: Tesla's once-leading quality in electric vehicles has declined due to controversial design changes, such as removing turn-signal stalks on some models and putting directional arrow buttons on a spoke of the steering wheel, frustrating owners and lowering its score in JD Power's 2024 Initial Quality Study. The study revealed that Tesla's quality is now comparable to rivals like Rivian (NASDAQ: RIVN), with EVs generally experiencing more problems than traditional vehicles due to new technologies, leading to higher dealership visits for repairs.
Webtoon Entertainment Inc (NASDAQ: WBTN)
28 Jun 2024: Webtoon Entertainment's shares surged by up to 14.3% above their IPO price on their Nasdaq debut, opening at US$21.30 and trading as high as US$24, valuing the company at US$2.71 billion. The company, backed by Naver, raised US$315 million from the IPO and plans to use the funds to expand in North America and invest in AI to support content creators, while continuing to grow its platform, advertising, and intellectual property businesses.
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