These are the top stories, from Wall Street to Silicon Valley, that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
It was a bad week of a bad year for Facebook ($FB). The stock took a nosedive after The New York Times published an extensive report on Wednesday night detailing how CEO Mark Zuckerberg and his COO Sheryl Sandberg downplayed and denied early reports of a widespread Russian misinformation campaign targeting U.S. Facebook users ahead of the 2016 presidential election. Perhaps even more worrisome for Facebook ー at least in terms of recruitment ー are reports that employee morale has plummeted, marketers are openly questioning whether to advertise on the platform, and college-aged engineers are increasingly doubting whether they want to work for what was once the preeminent Silicon Valley stable for talent. Read more.
Amazon pulled the trigger on its decision to split its “HQ2” in two ー one in Queens, N.Y. and another in Northern Virginia. Each location will be home to roughly 25,000 highly-skilled, highly-paid new workers. And not everyone is happy about it. In New York City, a backlash erupted almost immediately among local politicians and many residents. Many are arguing that the city gave away far too much in taxpayer-funded subsidies (at least $1.5 billion), the deteriorating subway infrastructure can’t handle all the new commuters, and Amazon’s ($AMZN) presence would exacerbate an affordable housing crisis and the gentrification of New York’s outer boroughs. Read more.
The chances of Britain leaving the European Union in any sort of orderly fashion shrunk this week as embattled Prime Minister Theresa May’s plan to leave the EU ー while keeping some close economic ties to the union ー was derided within her own government. Two cabinet secretaries resigned in protest and calls for May to step down intensified. A proposal to hold a second referendum that would trump the 2016 vote, while still a long shot, is gaining traction. May has ruled it out, though she admitted that the alternative seemed to be a “crash out” that could throw the UK’s economy and world markets into chaos. Read more.
The Food and Drug Administration is taking aggressive steps to combat teen smoking and the increasing popularity of vaping with a series of restrictions aimed at menthol cigarettes and flavored e-cigarettes and cigars. Under the proposals, stores that sell flavored nicotine oils for devices like the wildly popular Juul would have to put them in areas inaccessible to teens. It would also outlaw menthol cigarettes and cigars, tobacco products that are disproportionately popular among African-American smokers. Those proposals are likely to face lawsuits and could take years for full execution. Read more.
The economy is booming. Wages are finally rising. Unemployment is at its lowest level since the Nixon administration. And retailers are champing at the bit for the holiday shopping season to launch. Walmart ($WMT) gave a sense of the optimism in its earnings report this week, in which it forecast strong holiday sales and reported that its strategy of aggressive acquisition and investment in e-commerce is working. Holiday sales in the U.S. are expected to surpass $1 trillion this year for the first time ever. But not everyone is seeing the payoff. JC Penney ($JCP) missed revenue projections and cut its sales forecast ー a sign that, for retail, it’s very much a tale of two economies. Read more.
ー by Carlo Versano