The Week's Top Stories: Huawei Blacklisted and Amazon Big on Deliveroo

May 17, 2019

From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.

  • Huawei Blacklisted: Amid an escalating trade war, the Trump administration moved aggressively against the Chinese telecom giant Huawei by placing it on the Commerce Department's "Entity List," an unassuming name for what is effectively a blacklist of companies that can't do business with the U.S. The White House also put in place measures that limit American exports to Huawei. That action tanked the stocks of Huawei's core U.S. suppliers, such as Qualcomm ($QCOM) and Micron ($MU). Huawei spent $11 billion last year on chips and other telecom components from American firms. The Huawei ban comes after concerns that the company, closely tied to the Chinese government, could use its equipment for espionage purposes. Huawei's chief security officer Andy Purdy took to Cheddar to deny those assertions. See more.

  • Walmart Earnings: Walmart ($WMT) reported first-quarter earnings that topped expectations, even as the world's largest retailer warned that prices on some items would have to rise to offset headwinds from tariffs. Walmart is less exposed to China than many of its competitors, including Target ($TGT), largely due to the fact that groceries make up half of the company's revenues. Walmart's investments in its delivery and e-commerce arms appear to be paying off. After Amazon ($AMZN) said it would spend $800 million to get its delivery time for Prime users down from two days to one, Walmart shot back that it would offer free next-day delivery without a membership fee on orders over $35. See more.

  • Amazon Delivers: The UK-based delivery app Deliveroo got a major vote of confidence in the form of a $575 million funding round led by Amazon. That makes Amazon the biggest investor in Deliveroo, which competes in the UK and 13 other markets in a crowded field of online food-delivery services, including Uber Eats (Uber was once rumored to have eyed Deliveroo as a takeover target). Deliveroo was last valued at around $2 billion in 2017. The company, not yet profitable, makes money from charging restaurants commission and users a flat fee. Amazon's investment signals the e-commerce giant sees meal delivery as a growth business. See more.

  • Bitcoin Turbulence: The price of bitcoin plummeted by more than 10 percent to end a volatile week that coincided with wider stock market turbulence. BTC fell below $7,000 after a single executed sell order on a European crypto exchange. The cryptocurrency had been rallying since the beginning of the year, doubling in price before the Friday selloff. Even after the drop, bitcoin is still up 90 percent year-to-date.

  • Pinterest Earnings: Pinterest's ($PINS) first earnings report as a public company wasn't what investors had hoped for. Shares of the social network-inspiration platform plummeted 15 percent after reporting results that missed expectations ー though its posted losses shrunk from a year earlier. Before that report, Pinterest had been the bright spot in a slew of recent IPOs that stumbled out of the gate. Pinterest shares were up more than 50 percent from their IPO listing price last month. See more.

by Carlo Versano