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Good Morning!
TGIF! Here’s what is moving markets:
👉 Microsoft announces layoffs
👉 Intel’s earnings are in
👉 FTC launches an inquiry
Let’s get into it!
MICROSOFT: Layoffs Are Here
Microsoft plans to cut 1,900 jobs, about 9% of its gaming division, following its acquisition of Activision Blizzard, as revealed in a recent CNBC memo. Phil Spencer, CEO of Microsoft Gaming, stated these layoffs are to streamline operations. Former Blizzard President Mike Ybarra announced his departure from Microsoft and Blizzard on social media platform X, formerly known as Twitter.
Source: CNBC
Activision Blizzard, known for games like Call of Duty and Diablo, also owns King, creators of Candy Crush Saga. Despite the layoffs, Microsoft's stock remained stable, reflecting a common expectation of job cuts after large mergers. The acquisition of Activision Blizzard was Microsoft's biggest deal, twice the size of its LinkedIn purchase.
Meanwhile, tech sector layoffs continue in 2024, with over 100,000 job cuts in 2023. EBay and SAP recently announced layoffs, but their stock prices rose following the news.
🎯 GRIT TAKE: Layoffs in the tech industry have been here for a…upgrade to VIP to read the full GRIT Take.
EARNINGS: Intel
Intel's stock dropped over 10% in premarket trading on Friday after fourth-quarter results surpassed estimates, but its outlook for the current quarter was below expectations. Intel expects adjusted earnings per share of $0.13 for the first quarter, notably less than the anticipated $0.34, with forecasted revenue between $12.2 billion and $13.2 billion, below the expected $14.2 billion.
Source: Business Wire
Despite reporting a higher-than-expected fourth-quarter adjusted earnings per share of $0.54 and revenue of $15.4 billion, Intel’s Data Center and AI unit underperformed, earning $4 billion against a $4.1 billion estimate. However, the company's Client Computing Group exceeded forecasts with $8.8 billion in sales.
CFO David Zinsner noted that Intel achieved over $3 billion in cost savings in 2023. The company is also expanding its role as a foundry for other chipmakers and recently opened a new manufacturing facility in New Mexico, continuing its efforts to regain a leading position in the semiconductor industry.
FTC: Launches Inquiry
The Federal Trade Commission (FTC) announced a massive inquiry into leading artificial intelligence companies, including Amazon, Alphabet, Microsoft, Anthropic, and OpenAI. Announced by FTC Chair Lina Khan at the agency’s AI tech summit, the study aims to examine investments and partnerships in the AI field, particularly with major cloud service providers.
Source: Investopedia
Under Section 6(b) of the FTC Act, the FTC will conduct this independent inquiry, separate from its law enforcement activities. This enables the agency to demand detailed business information from the companies involved. The FTC has previously used this approach to investigate other sectors, such as the prescription drug industry and past tech company acquisitions.
Headlines You Need To Know: 🎙
One Of The Best Stock Trades Ever
This guy is one of the greatest stock traders ever to exist, known as the Great Bear, but tragically killed himself after losing his entire fortune. Jesse Livermore was born in 1877 and started trading stocks when he was 14. Most modern-day trading strategies are based on what Livermore used to do. Livermore’s big breakthrough came during the San Francisco Earthquake of 1906.
Source: Business Insider
He shorted the market and earned over $250,000, which is worth $8 million today. But his true genius was shown during the Panic of 1907 when he made over a million dollars, or $32 million, in just one trade. Livermore became a living legend in the financial world but lost his wealth multiple times during the roaring 20s.
Livermore’s most legendary trade came in 1929 when he predicted the great crash. He made a fortune by shorting the market, reportedly earning $100 million or $1 billion today. Unfortunately 1940, Livermore blew up his entire trading account and lost his whole fortune. On this same day, Livermore tragically killed himself out of embarrassment. His legacy still lives on today.
Chart of the Day
📊 Pokemon Franchise
Source: StatsPanda
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