How are you? (April 24-30)
Elon Musk buys Twitter
Elon Musk reached an agreement Monday to buy Twitter for about $44 billion, a deal that was unanimously approved by Twitter’s board. The price comes in at $54.20 per share, a 38 percent premium over the company’s stock price in April, before Mr. Musk revealed he had bought a 9 percent stake in Twitter. Within weeks, Mr. Musk, the richest person in the world, took his offer from something investors shrugged to a serious proposition. The turning point came when he submitted documents proving he had the funding to back up his offer. According to data from Dealogic, it could now be the biggest deal to sell a company in at least 20 years. Still, much remains uncertain about how the mercurial billionaire will execute on his vision for a platform with less moderation.
Cost of Inventory Manipulation
The latest chapter of one of the most high-profile Wall Street investigations in years unfolded on Wednesday, when federal agents arrested Bill Hwang, the owner of the investment firm Archegos Capital Management, and her former chief financial officer, Patrick Halligan, at their home. † The two were charged with extortion conspiracy, securities fraud and wire transfer fraud, all in connection with a scheme, according to a 59-page indictment, which involved deliberately deceiving banks and manipulating stock prices. Initially, they were able to evade scrutiny because of the loose regulation surrounding ‘family offices’ such as Archegos – companies that manage investments for the ultra-rich. But last year, the company imploded and $100 billion in shareholder value disappeared almost overnight. Through their lawyers, the men pleaded not guilty.
Economy shrinks but remains resilient
The US economy contracted in the first three months of the year, with gross domestic product falling 0.4 percent in the first quarter, adjusted for inflation, or 1.4 percent year on year. The decline was largely due to slower inventory growth and a widening trade deficit, as US exports outpaced imports. Without it, a measure of underlying growth rose 0.6 percent in the first quarter, and the White House preferred to focus on the data without what President Biden called the “technical factors” of stocks and trading. Mr Biden also pointed to bright spots in Thursday’s GDP report that showed strong consumer spending and continued business investment – signs that the economic recovery is still resilient.
What’s next? (May 1-7)
A jobs report that may look familiar
Jobs data for April will be released Friday and are expected to be similar to March’s. Analysts expect an increase of about 385,000 jobs — US employers added 431,000 in March — and an unchanged unemployment rate of 3.6 percent. Last month, some economists suggested that jobs “may be approaching their best time” and that factors like rapid inflation and higher interest rates could soon slow the labor market. The economy has recovered more than 90 percent of the 22 million jobs lost at the peak of the pandemic lockdowns in the spring of 2020, but interventions by the Federal Reserve and other forces threaten to cut those gains.
