Overview of TOP weekly news 27.4.2022

27 / 04 / 2022
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BMW and Audi suspended shipments

German giants in car manufacturing industry, BMW and Audi – Volkswagen concern, have suspended shipments to China by train because of the war in Ukraine. Despite both brands producing most of their vehicles in China, some part still gets delivered by train or ship. It is quite a big hit for the companies, as last year Audi delivered more than 700.000 vehicles to China, while BMW delivered more than 840.000 BMWs and MINIs to Chinese customers. Companies added that they had immediately stopped the transport through Russia and is now done by ship.

Elon Musk and Twitter reached an agreement

Since Elon buying more than 9% of the Twitters stocks there have been speculation, that he might slowly take over the company. Those speculations now seem to be on point, as Elon Musk offered to buy Twitter for 44 billion dollars, or 54.20 USD per share. The first time an offer was rejected, however now there are reports that both parties came to an agreement. What is so far known about the negotiations is that company agreed to be sold for the mentioned amount; current CEO Parag Agrawal will receive 42 million USD compensation if replaced and 1 billion USD fee if Elon terminates the buying.

Robinhood to fire 9% of employees

One of the most known trading platforms in USA, Robinhood, said that they will have to terminate the contract with around 9% of their employees, which made the stock tumble for about 5% already since the news came out. Company said that the headcount was getting bigger and bigger and created duplicate roles and job functions. Headcount in the company since December last year is 3800 employees. Their platform became the most used during Covid-19 pandemic, especially among young investors. Robinhood also stated they would continue to do their best to continue the momentum. [1]

Movement of Robinhood’s stock since July 2021. (Source: Investing) *

Mercedes-Benz has positive outlook

German car producing giant, Mercedes-Benz announced they expect inventories to remain on high levels, despite the global chip shortage. Sales were still strong despite the high price policy from the company, however CFO Harald Wilhelm said that they could have sold even more cars in the first quarter without lowering the prices. Raw material price hikes accounted for around half of the 1,1 billion dollars in headwinds in the first quarter, Wilhelm said, with the remainder split between energy and logistics costs and the stopping and resuming production owing to supply chain problems. [2]

China lockdown has effect on earnings reports

Few companies like GE and 3M reported that China’s lockdown is disrupting the already damaged supply chains and is visibly influencing their revenue. China’s zero covid policy made the multiple cities to shut down, along with factories, etc. People are basically not allowed to leave their home, let alone go to work. In the beginning, some companies were also practicing the way that employees had to sleep at work, so they could function normally and not leave the premises. Not only this is hurtful to them. There are also high energy prices and prices of raw materials.

What to watch this week:

  • On Thursday we can follow Bank of Japan’s economic outlook report
  • On Friday important data from USA – Core PCE price index as well as GDP data from Canada

* Past performance is no guarantee for future results.

[1,2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.

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