Posts with «finance» label

Activision Blizzard CEO Bobby Kotick gets to keep his board seat

Bobby Kotick will get to keep his seat on Activision Blizzard's board of directors despite catching flak over the alleged role he played in creating the company's toxic workplace culture. At the video game developers' annual meeting of stockholders, investors voted on several proposals, as well as who gets to be on the company's board of directors over the next year. A total of 533,703,580 shareholders have voted to keep Kotick on the board, while on 62,597,199 have voted against it. As GameInformer notes, that means he gets to keep his seat until the next meeting in 2023. 

Activision Blizzard employees walked out of their jobs last year and called for Kotick's resignation after The Wall Street Journal reported that the CEO knew about the worst instances of abuse in the company and even protected the employees accused of harassment. If you'll recall, California's Department of Fair Employment and Housing sued the publisher in July 2021 for allegedly fostering a "frat boy" culture. The California agency investigated the company over the course of two years and found that women working for Activision Blizzard were paid less than their male counterparts and were subjected to constant sexual harassment. 

More recently, the New York City Employees' Retirement System sued Kotick, calling him unfit to negotiate the company's pending sale to Microsoft due to his "personal responsibility and liability for Activision's broken workplace." NYC's retirement system represents the city's police, teachers and firefighters and owns Activision Blizzard stock. The company named a new chief diversity, equity and inclusion officer in April to help the company have a more inclusive workplace. In response, a group of employees aiming to protect workers from discrimination formed a committee to outline a list of demands for Kotick and the new chief diversity officer. 

While majority of the shareholders have chosen to keep Kotick on the board, they also approved a plan to release an annual public report detailing how Activision handles any sexual harassment and gender discrimination dispute. The report must also detail how the company is preventing these incidents from happening and what it's doing to reduce the length of time it takes to resolve them. 

Netflix lays off 300 more employees

Netflix has laid off around 300 people in its latest round of job cuts. Most of the layoffs were in the US, according to Variety, and a number of departments were affected.

“Today we sadly let go of around 300 employees,” a Netflix spokesperson told the publication. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition.”

Netflix laid off 150 employees, along with many part-time workers and contractors, back in May. It also let go 10 or so staffers from its in-house news site, Tudum, in April. The company has around 11,000 employees around the globe.

The layoffs follow a steep drop in Netflix’s share price, which has fallen by around 70 percent since the beginning of the year. In the first quarter of 2022, the company’s subscriber count dropped for the first time. It fell by 200,000, in large part because Netflix pulled out of Russia and lost 700,000 subscribers there. In its latest earnings report, Netflix said it expects to lose as many as 2 million subscribers in the current quarter too.

Along with cost cutting, Netflix is looking at more ways of generating revenue. These include ad-supported plans and extra fees for those who share their accounts with people living in other households.

The company still plans to invest heavily into content, though. It has earmarked around $17 billion for that purpose this year. News of the layoffs comes the week after Netflix announced a reality competition series based on its all-conquering drama, Squid Game. The winner will take away $4.56 million.

You can pay for your Lyft ride with cash now

Ridesharing isn't typically viable in the US if you want to pay with cash, but that won't be a problem now that Lyft has introduced an option to pay for rides using cash. Visit 35,000-plus stores like Walmart, ACE Cash Express and Kroger and you can present a barcode or ID number to turn physical money into a balance accessible through the Lyft app or website. You'll have to scan approved identification after requesting your first ride.

You'll need to add at least $30 whenever you contribute to the balance. Your transportation options will also be limited if you go cash-only. You have to attach a credit card or another payment option to your account if you want to hire a bike or scooter.

Lyft pitches the feature as a way to democratize rideshare services. About 7.1 million US households either had no bank accounts or only limited access to conventional financial services as of 2019, according to FDIC data, and that frequently affected communities of color. The cash option lets those unbanked people request on-demand rides without paying for cabs. We'd add that this could help if you're uncomfortable with linking payment cards to transportation services like this.

The move might give Lyft an edge in the country. Its rival Uber lets American riders use a balance to pay for trips, but they currently have to load funds using payment cards, PayPal and Venmo. For now, Lyft is your only major choice if you'd rather pay with paper.

PayPal will let users split the cost of purchases over up to 24 months

PayPal is expanding its buy now, pay later options with a longer-term payment plan. The company has enabled users to cover the cost of a purchase over a few interest-free payments and it also offers credit cards. Pay Monthly, which is issued by WebBank, is another option for folks in the US.

It's valid for purchases between $199 and $10,000. The cost will be split across monthly payments of between six and 24 months. If you select the Pay Monthly option at checkout, you'll then need to complete an application. Should that be approved, you'll be able to select from three payment options with different time frames. APR is calculated on a risk basis and will be between zero and 29.99 percent. The first payment is due a month after purchase.

You can set up automatic payments from your debit card or bank account. Alternatively, users can manage payments through PayPal's app and website. As with the company's other buy now, pay later options, there are no late fees. PayPal says millions of retailers will support Pay Monthly — including Samsonite, Fossil and Advance Auto — and that purchases will be eligible for PayPal Purchase Protection.

With its latest option, PayPal is getting out ahead of Apple Pay Later, which will be rolled out as part of iOS 16 later this year. That's aligned more with PayPal's Pay in 4 option, in that users will make four equal payments over six weeks, with no interest or late fees. However, purchases are said to be capped at $1,000.

Such moves by the likes of PayPal, Apple and Square are indicative of a broader trend of major tech companies moving deeper into lending, a finance sector that was primarily the domain of banks. However, there are risks to using now, pay later services, especially if consumers fall behind on payments.

Binance sued over the collapse of the TerraUSD stablecoin

A Utah resident has filed a lawsuit against Binance US and its CEO, accusing them of falsely advertising TerraUSD as a safe asset backed by fiat currency. The plaintiff named Jeffrey Lockhart alleged that because Binance isn't registered as a securities exchange with the US government, it has limited obligation to disclose information about assets traded on its platform. "Crypto exchanges made massive profits by flouting securities laws and causing real harm to real people," the law firm representing Lockhart said, according to Reuters.

A Binance spokesperson told the news organization, however, that the exchange is registered with the US Treasury Department's Financial Crimes Enforcement Network and complies with all applicable regulations. "These assertions are without merit and we will defend ourselves vigorously," they said. 

If you'll recall, TerraUSD's value collapsed in May, causing massive losses for investors who trusted its classification as a stablecoin that's supposed to maintain its value of $1 per coin. Unlike other stablecoins backed by real-world assets, though, TerraUSD is an "algorithmic" stablecoin that's not backed by fiat currency. Instead, it's backed by a cryptocurrency called Luna and has a mechanism in place to restore its value to $1 if it ever falls. Investors were enticed to invest their money into TerraUSD due to the opportunity to make money with the Anchor lending program, which promised annual yields of 20 percent for deposits of the coin. Terra's mechanism failed to protect its value, however, and it's currently being traded at less than one cent. 

Lockhart is hoping for his lawsuit to be registered as a class action on behalf of all investors who purchased Terra from Binance. The world's largest cryptocurrency exchange also paused bitcoin withdrawals for a few hours yesterday due to a "stuck on-chain transaction." That came days after reports emerged, claiming that Binance had become a hub for fraudsters and drug traffickers and had helped launder $2.35 billion in illicit funds.

Automakers want Congress to drop the EV tax credit cap

The $7,500 federal EV tax credit has been used for several years to entice consumers to make greener car purchasing decisions, but it has expired for some automakers — and they feel the government needs to remove limits on that incentive. Reuters has learned the CEOs of Ford, GM, Stellantis and Toyota sent a letter to congressional leadership asking them to eliminate the sales-based tax credit cap. The move would help counter economic factors and supply shortages that have raised the costs of producing EVs, according to the companies.

The credit currently applies to the first 200,000 cars sold by any given brand. GM and Tesla have already reached the 200,000-unit mark, while both Ford and Toyota could hit the cap this year. This doesn't affect state-level discounts. The companies hope Congress will replace the unit-based cap with a sunset date that would end the credit once the EV marketplace is "more mature."

It's not certain that enough politicians will warm up to the idea. Senator Joe Manchin, for instance, recently questioned the need for extended credits when EV demand regularly outstrips supply. And when the current Senate frequently shoots down bills without clear bipartisan support, any attempt to legislate the credit could fall apart.

The companies have strong motivations to act now, though. Republicans may regain control of one or both sides of Congress during this fall's midterm elections, and car industry execs are concerned the shift in power could kill chances of extending tax credits. Former President Trump tried to axe the credit in his proposed 2020 budget, and had the support of Republicans — the chances aren't high that the GOP will back an extension.

The customer tax breaks might not be as necessary as they once were, mind you. GM plans to sell a Chevy Equinox EV around $30,000, while Tesla has long-term plans for a $25,000 car. Although these models are years away and won't compete with the lowest-priced conventional cars, they hint at a future where EVs are genuinely affordable without government subsidies.

Crypto lending giant Celsius 'pauses' withdrawals after token value plunges

Another big name in crypto finance is taking drastic steps in the wake of plunging currency values. As The Vergenotes, lending heavyweight Celsius Network has 'paused' all withdrawals, inter-account transfers and Swaps in response to "extreme market conditions." The move is meant to stabilize the liquidity of assets and provide a better opportunity to meet withdrawal obligations, according the company.

The firm didn't say when it would lift the freeze, or what would happen next. It promise to restore usual operations "as quickly as possible," but cautioned that the effort would "take time" and could include delays.

Celsius has struggled like much of the cryptocurrency market. Its CEL token was worth $7 roughly a year ago, but had tumbled to $3 by early April and is worth just 21 cents as we write this. The company claimed on June 7th that it had the reserves and Ethereum to meet obligations, but CEL's value was cut by more than half in just the few days after that initial announcement.

Critics have raised concerns about Celsius' unusually high yields (currently over 18.6 percent for deposits) and its links to the failed stablecoin Terra. Its CFO was arrested in November over fraud, money laundering and sexual assault allegations. Regulators in Alabama, New Jersey, New York and Texas have also scrutinized Celsius' activities, with New Jersey issuing a cease-and-desist order last September. Simply put, there have long been worries Celsius' business was unsustainable — the activity pause doesn't help matters.

Customers, meanwhile, might pay the price. Unlike a conventional bank, Celsius doesn't have FDIC insurance to protect users. If it fails, the roughly 1.7 million people who use the lender might not have much opportunity to recover their lost finances. While some crypto asset regulation is in development, it might arrive too late for Celsius' clients. 

Apple created a subsidiary to handle Pay Later loans

When its Pay Later service launches alongside iOS 16 later this year, Apple plans to handle lending decisions on its own. According to Bloomberg, the tech giant has established a subsidiary called Apple Financing to conduct credit checks and customer approvals. The new firm will operate separately from Apple, but it has obtained the necessary state licenses to offer the feature.

While Apple has dabbled in financial services before, it did so with the help of institutions like Goldman Sachs. The investment bank is still involved in Apple Pay Later. According to Bloomberg, the firm will issue the Mastercard payment credentials customers will use to complete purchases, but it won’t handle lending and credit assessments like it currently does with Apple Card.

The move sees Apple attempting to replicate a strategy that has worked for it in the past. The company has invested significant time and money to develop in-house versions for many of the components that power its computers and mobile devices. Outside of helping make its products more compelling to consumers, the strategy has allowed Apple to lessen its dependence on external suppliers like Intel and potentially increase its revenue. And it appears Apple hopes to achieve a similar outcome on the financial services front.

According to Bloomberg, the company is working on its own payment processing engine as part of an initiative dubbed — not so subtly — “Breakout.” It’s also developing tools for fraud analysis and interest calculations, among other customer-facing features. As with Apple’s push into subscriptions with services like TV+ and Fitness+, the company likely sees those efforts as a way to keep current iPhone, iPad and Mac customers tied to its ecosystem.

Twitter will reportedly give its full data stream to Elon Musk

Twitter could comply with Elon Musk’s demand for more data about its users as soon as this week. According to The Washington Post, the company plans to give the billionaire full access to its full “firehose,” an internal database that includes details on the more than 500 million tweets posted to the service every day. In addition to representing a real-time record of what’s happening on Twitter at any moment, the trove includes device data and information about the accounts that access the platform.

After Twitter accepted Musk’s $44 billion buyout offer in April, the billionaire announced in May the deal was “temporarily on hold” over concerns he had about fake accounts. Twitter has consistently claimed that bots represent less than five percent of its daily users, a number Musk says he wants to confirm before moving forward with the acquisition. On Monday, Musk accused the company of committing a “material breach” of the merger agreement by allegedly refusing to disclose enough information about fake accounts.

At the time, Twitter said it would “continue to cooperatively share information” with Musk as it worked toward completing the transaction. “We believe this agreement is in the best interest of all shareholders,” the company told The Post, reiterating its statement from Monday. “We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”

How many bots and fake accounts there are on Twitter is important to Musk because that number would have a significant impact on his ability to monetize the platform through ads. Musk has committed about $33 billion of his personal wealth to buy the company, and he’s required to go through with the deal unless he can show Twitter misled him or that its value has changed.

IBM begins laying off its entire Russian workforce

IBM will begin an “orderly” wind-down of its operations in Russia, according to a memo from CEO Arvind Krishna that was released publicly today. The company suspended business operations in the country back in March, joining a wave of other Western companies that chose to either halt sales or pull out of Russia completely following its invasion of Ukraine. Despite no longer doing business in Russia, IBM kept paying its Russia-based employees. But US sanctions on Russian banks have made it harder for the company to pay its Russia-based workforce, Reutersreported last month.

The wind-down means that IBM will also terminate the employment of its Russia-based workforce. “This process will commence today and result in the separation of our local workforce. Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty. We recognize that this news is difficult, and I want to assure them that IBM will continue to stand by them and take all reasonable steps to provide support and make their transition as orderly as possible,” wrote Krishna in the memo.

The company told investors that no longer doing business with Russia will have very little impact on its bottom line. “Russia is a very de minimis part of IBM,” the company’s finance head Jim Kavanaugh said during a first-quarter earnings call in April. Russia accounted for roughly 0.5 percent of IBM’s total revenue last year, or $300 million out of its total revenue of $57.4 billion. 

IBM has a number of high-profile customers in Russia, including federal banks, energy companies and Russian Railways. The company even held its Think Summit in Moscow back in 2019, where it highlighted its many Russian clients. But since March, the company has stopped providing “goods, parts, software, services, consulting and technology” to Russian companies, according to Reuters.