Posts with «investment & company information» label

FTX implosion could affect 'more than one million' investors

Bankruptcy documents filed by the crypto exchange FTX indicate that it currently faces more than 100,000 creditors, but that number could expand to over one million, The Financial Times has reported. The company also stated that it has been in contact with US federal prosecutors, as well as "dozens of federal state and international regulatory agencies" over the last few days. 

FTX filed for bankruptcy last week following the sudden collapse of its exchange. Today, the Securities Commission of The Bahamas said it had received court approval to appoint two partners from the Bahamas and Hong Kong to oversea the unwinding of FTX Digital Markets, a key part of FTX. The filing called the state of affairs "unprecedented," noting that "barely more than a week ago, FTX, led by its co-founder Sam Bankman-Fried, was regarded as one of the most respected and innovative companies in the crypto industry." 

In addition, the Royal Bahamas Police confirmed yesterday that they were working "to investigate if any criminal misconduct occurred," according to the FT. The day after the bankruptcy was filed, the company reported that millions of dollars went missing from crypto wallets following "unauthorized transactions." In addition, at least $1 billion worth of customer funds vanished from FTX prior to that.

FTX's troubles started after the price of its native FTT token plunged and numerous users withdrew their cryptocurrency. After it was reported that FTX was facing a liquidity crisis, rival Binance said it would sell off around over $500 million worth of FTT, all but wiping out the token's value. Binance then said it would take over FTX, but backed out of the deal a day later, citing concerns that emerged while carrying out due diligence. Bankman-Fried said he plans to eventually publish an account detailing exactly what happened to FTX.

Hulu with Live TV adds 14 new channels ahead of next month's price increase

Hulu is adding 14 new channels to its Live TV offering, the Disney-owned streaming service announced on Monday. Five of the additions – the Weather Channel, Comedy.TV, Hallmark Channel, Hallmark Movies & Mysteries and Hallmark Drama – are already available to watch, with the remaining nine (most of them Vevo music channels) joining the service on December 1st.

That means most of the new additions will arrive a week before Disney increases the cost of its Hulu + Live TV bundle. After December 8th, the with ads package will cost $75 per month, up from $70 currently. With today’s expansion, Hulu notes the Live TV component of its service provides access to more than 85 channels, with mainstays like CNN, EPSN, MTV and the NFL Network represented.

For some, the new channels might make them reconsider canceling or modifying their Hulu + Live TV subscription, an outcome Disney is clearing banking on. Last week, the company announced Disney+, Hulu and ESPN+ had a combined customer base of 236 million subscribers, putting the company in the ballpark of Netflix’s numbers. At the same time, Disney said operating losses for streaming increased from $0.8 billion to $1.5 billion during its most recent fiscal quarter. Moving forward, Walt Disney CEO Bob Chapek said the company expects those losses to narrow, partly thanks to the price increases it announced earlier this year.

FTX investigates ‘unauthorized transactions’ after millions go missing from crypto wallets

Mere hours after filing for Chapter 11 bankruptcy protection, FTX’s fraught situation worsened dramatically. On late Friday night, the crypto exchange claimed it had been hacked after millions of dollars in digital assets were siphoned from FTX wallets despite the company freezing withdrawals earlier in the day. The exact amount of missing money is unclear, but CoinDesk puts the figure at more than $600 million.

“FTX has been hacked. FTX apps are malware.” the company posted on its official Telegram account. It urged customers to avoid the FTX website and delete its apps from their phones. Following the announcement, FTX General Counsel Ryne Miller said the company was moving all of its digital assets offline “to mitigate damage upon observing unauthorized transactions."

Following the Chapter 11 bankruptcy filings - FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening - to mitigate damage upon observing unauthorized transactions.

— Ryne Miller (@_Ryne_Miller) November 12, 2022

As CoinDesk points out, some crypto community members have speculated the funds may have been withdrawn by someone from FTX founder Sam Bankman-Fried’s inner circle. Bankman-Fried hasn’t commented on the incident. The missing millions are in addition to at least $1 billion worth of customer funds that vanished from FTX before the company filed for bankruptcy. According to Reuters, Bankman-Fried “secretly transferred” $10 billion from the crypto exchange to his trading company Alameda Research. He reportedly disclosed the financial gap to other FTX executives on November 6th, mere days before Binance announced and subsequently abandoned its bid to rescue the firm.

“We didn’t secretly transfer,” he told Reuters. “We had confusing internal labeling and misread it.” When asked about the missing funds, he reportedly replied “???” On Saturday, Bankman-Fred also denied reports he had flown to Argentina after he resigned as CEO of FTX.

Disney reportedly freezes hiring and expects some layoffs

Disney CEO Bob Chapek has told division leads in a letter that the company is implementing cost cutting measures in part to help it "achieve the important goal of reaching profitability for Disney+ in fiscal 2024." Based on the internal memo obtained by CNBC, Disney is planning to limit additions to its workforce through a targeted hiring freeze. It will still welcome new people for the "most critical, business-driving positions," but all other roles are on hold for now. Chapek has also admitted in his letter that Disney "anticipate[s] some staff reductions" as it looks at all aspects of its business to find places where it can save money. 

Chapek's letter comes after Disney reported less-than-stellar earnings for the previous quarter. While Disney+ welcomed 12.1 million new subscribers for the company's fourth fiscal quarter ending on October 1st, the company's operating loss for streaming jumped from $0.8 billion to $1.5 billion. The company expects its losses to taper off going forward, thanks to its streaming services' price hikes and the launch of an ad-supported tier on Disney+. In his memo, Chapek also reiterated he is "confident in [the company's] ability to reach the targets [it has] set," but Disney clearly intends to tighten its belt until it hits its goals.

Disney is but one of the many companies imposing a hiring freeze due to the economic downturn. When Meta chief Mark Zuckerberg announced that the Facebook parent company is laying off 11,000 employees, he also said that it's extending its hiring freeze through the first quarter of 2023. Amazon froze hiring at its corporate offices earlier this month, as well. 

Crypto exchange FTX files for bankruptcy as its CEO resigns

Twitter isn’t the only notable tech company to bandy around the word “bankruptcy” this week. After a stunningly rapid collapse, crypto exchange FTX has filed for Chapter 11 bankruptcy protection, while founder Sam Bankman-Fried has resigned as CEO.

The bankruptcy filing covers FTX Trading, FTX US, Alameda Research and around 130 other companies under the umbrella of the FTX Group, according to a press release. Some others, such as FTX Australia and FTX Express Pay, are not involved in the bankruptcy proceedings. Filing for Chapter 11 bankruptcy doesn't necessarily mean that a company is dead in the water — it allows a business to keep trading while it figures out a plan to pay back creditors. However, it's a tough position to come back from.

Press Release pic.twitter.com/rgxq3QSBqm

— FTX (@FTX_Official) November 11, 2022

"The immediate relief of Chapter 11 is to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders," new CEO John J. Ray III (a former Enron chairman who came in to oversee that company's liquidation) said in a statement. "The FTX Group has valuable assets that can only be administered in an organized, joint process. I want to [assure] every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency." Ray suggested that stakeholders should remain patient, noting that "events have been fast-moving and the new team is engaged only recently."

The company swiftly found itself in dire straits after the price of its native FTT token nosedived and many users withdrew their cryptocurrency. Following reports that FTX was facing a liquidity crisis, Changpeng Zhao, the CEO of rival crypto giant Binance, said his company would sell off around $529 million worth of FTT. That all but wiped out the token's value.

Binance then agreed to bail out FTX by taking over the company. However, it backed out of the deal a day later, citing concerns that emerged while conducting due diligence. Bankman-Fried went on to apologize for the mess and said on Thursday he was doing everything he could to raise funds and do "right by users." He stepped down just a day later. 

"This doesn't necessarily have to mean the end for the companies or their ability to provide value and funds to their customers chiefly, and can be consistent with other routes," Bankman-Fried wrote on Twitter after the bankruptcy filing. "I'm going to work on giving clarity on where things are in terms of user recovery ASAP." Bankman-Fried added that he will soon publish a more complete, play-by-play account of what happened to FTX.

Meanwhile, reports have suggested that the Department of Justice and Securities and Exchange Commission are investigating FTX. It's not clear when the DOJ started looking into the company's dealings, but the SEC’s investigation has reportedly been ongoing for several months.

Crypto exchange Binance abandons rescue of FTX one day after announcing takeover bid

FTX won’t be rescued by its biggest rival. One day after announcing a proposed deal to buy the cryptocurrency exchange, Binance said it didn’t like what it found in the company’s books. “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX,” Binance tweeted on Wednesday afternoon. “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.

— Binance (@binance) November 9, 2022

The abandoned takeover bid caps off a tumultuous week for FTX. On November 2nd, Coinbasepublished a report that revealed that the cryptocurrency exchange was facing a liquidity crisis. In response to the article, Binance CEO Changpeng Zhao announced that the company would sell about $529 million worth of FTX’s FTT token, a move that wiped out the value of the cryptocurrency and launched a public spat between the competing exchanges.

Even when the acquisition was first announced, the likelihood of it moving forward seemed uncertain at best, with Zhao stressing at the time that the deal was non-binding. “This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time.” he said on Tuesday. By the following morning, The Wall Street Journal and Coinbase came out with separate reports claiming Binance was strongly leaning toward abandoning the rescue.

Less than an hour later, Bloomberg reported that the US Securities and Exchange Commission was investigating FTX to determine if the company had mishandled customer funds. It’s worth noting here that the Department of Justice and SEC are also investigating Binance.

Disney now matches Netflix's subscriber numbers across its combined services

Disney+ has welcomed 12.1 million new subscribers for the company's fourth fiscal quarter ending on October 1st, and according to Yahoo Finance, that's 3 million more than analyst estimates. In all, Walt Disney added 14.6 million subscriptions for Disney+, Hulu and ESPN+, bringing its total number of streaming subscribers so far to around 236 million. While Disney+ alone with its 164 million subscribers have yet to reach Netflix numbers, all three of the company's services combined had amassed members that can rival the streaming giant's. Netflix revealed that it has around 223.09 million subscribers during its latest earnings report in October. 

Despite the impressive growth in subscriber number, Disney's operating loss for streaming increased from $0.8 billion to $1.5 billion for the quarter. Disney+ experienced more losses within the period due to higher production and technology costs, as well as an increase in marketing expenses. There were also no Premier Access releases for the quarter, such as last year's Black Widow and Jungle Cruise. That said, the losses were offset in part by higher subscription costs, which will become even higher in December. 

Walt Disney CEO Bob Chapek said that the company expects its streaming losses to narrow going forward, thanks to its price increases and the launch of an ad-supported tier on Disney+. The company even believes that Disney+ is on track to achieving profitability in the fiscal year of 2024, assuming the lack of a "meaningful shift in the economic climate." If you'll recall, Disney is raising its streaming prices across the board this December, and the ad-supported tier for Disney+ is launching on December 8th for $11 a month. 

Crypto giant Binance is buying its rival FTX following a very public dispute

Two of the largest crypto exchanges have just announced one of the stranger tech mergers in recent memory (and that's saying something). Binance plans to acquire its rival FTX after a brief but very public dispute. As Bloombergexplains, Binance CEO Changpeng Zhao sold about $529 million in FTX's native token on November 6th in response to "recent revelations that came to light," particularly a CoinDeskreport that FTX was facing a liquidity crisis. That led to FTX chief Sam Bankman-Fried accusing Binance of attacking his company with "false rumors," and maintaining that everything was "fine." By today, however, the two companies had reached a takeover deal while acknowledging that Binance would help resolve a "liquidity crunch" affecting FTX's transactions.

Data suggests FTX may have been in a particularly bad state. In a discussion with TechCrunch, CryptoQuant noted that FTX's net crypto asset holdings plunged 83 percent in just the past two days. That reportedly made withdrawals so difficult that FTX had to introduce stablecoin (crypto pegged to an external value) liquidity to process the moves through the markets or other exchanges. The company's stablecoin reserve has fallen by 93 percent in the past two weeks, and related withdrawals fell to near-zero by early this morning. The trouble prompted an investor "exodus," Bloomberg says.

1) Hey all: I have a few announcements to make.

Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).

— SBF (@SBF_FTX) November 8, 2022

The deal is non-binding, and the companies will only start conducting due diligence (that is, an appraisal) in the "coming days." If completed, however, the acquisition could shake up the crypto industry by eliminating Binance's main competitor. This won't overcome fears of a sustained crypto market downturn, but may give Binance a US presence it doesn't currently have.

That "if" is important, mind you. FTX's Bankman-Fried has been testifying in Congress, and Binance has reportedly faced investigations from both the US Securities and Exchange Commission as well as the UK's Financial Conduct Authority. The countries are concerned Binance isn't complying with regulations, and (in the US) possibly breaking the law. It's not guaranteed that regulators in either country will be keen on the proposed union, particularly when Binance's US affiliate was banned in 2019.

Nintendo lowers Switch sales forecasts but still expects a healthy year

Nintendo has announced a solid quarter of earnings, with revenue for the quarter at 349.5 million yen ($2.38 billion) and a 118.7 million yen ($809.6 million) operating profit. That's up by 15.9 and 18.5 percent over last year, largely in part due to a weaker yen, sales outside Japan and the launch of Splatoon 3.

The company is less bullish on Switch console sales, however, lowering its forecast from 21 million to 19 million for 2022. However, it doesn't think that will affect earnings much, with revenue forecast to be 50 billion yen higher at 1.65 trillion yen ($11.25 billion) and operating profit remaining the same at 500 billion yen ($3.4 billion). 

Nintendo said that it has seen a gradual improvement in the supply of semiconductors and other components, along with a "recovery trend in hardware manufacturing for the Switch." However, it lowered the forecast based on sales to date, with the weak yen making up the difference in revenue and profit. 

It also detailed what that might mean for consumers who want to buy a Switch for the holidays. "By continually working to front-load production and selecting appropriate transportation methods in preparation for the holiday season, we will work to deliver as many consoles as possible to consumers in every region of the world."

That'll be helped by the launch of a bunch of new games, as well. On top of Splatoon 3, it released Bayonetta 3 in October, Pokémon Scarlet and Pokémon Violet in November, Fire Emblem Engage coming in January 2023, and Kirby’s Return to Dream Land Deluxe arriving in February 2023.

Meta will reportedly announce ‘large-scale’ layoffs next week

Facebook parent company Meta could announce large-scale layoffs as early as next week, according to The Wall Street Journal. The outlet reports the company is planning to cut “many thousands” of employees, with an announcement coming as soon as Wednesday. Meta currently employs more than 87,000 individuals. The cuts could be the largest workforce reduction conducted by a tech company this year, surpassing the layoffs made by Twitter on Friday. The cuts would also represent the first broad restructuring in Meta’s history.

Meta declined to comment. A spokesperson pointed Engadget to a statement CEO Mark Zuckerberg made during the company’s recent Q3 earnings call. “In 2023, we're going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year,” he said. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

As The Journal points out, Meta grew significantly during the first two years of the coronavirus pandemic, adding more than 27,000 employees in 2020 and 2021. The company’s hiring spree continued through the first nine months of 2022, a period during which it brought on an additional 15,344 employees. While the company was a major beneficiary of the pandemic, its fortunes have changed in recent months. In July, the company reported its first-ever revenue drop. The company has blamed its recent hardships on tough competition from TikTok and the release of Apple’s contentious App Tracking Transparency feature.

At the same time, Mark Zuckerberg’s bid on the Metaverse has so far failed to create new revenue opportunities for the company while costing it dearly. Since the start of 2021, Meta has spent $15 billion to make virtual and augmented reality mainstream with little success. The company expects to lose even more money on the project in 2023.