A judge has sentenced former Theranos executive Ramesh “Sunny” Balwani to nearly 13 years in prison for his role in the company’s blood-testing hoax — a sentence slightly longer than that given to the CEO, who was his lover and accomplice in one of Silicon Valley’s biggest scandals.
The sentencing for Ramesh “Sunny” Balwani, who was convicted in July of fraud and conspiracy, comes less than three weeks after Elizabeth Holmes, the company’s founder and CEO, received more than 11 years in prison for her role in the scheme. The scandal revolved around the company’s false claims to have developed a medical device that could scan for hundreds of diseases and other potential problems with just a few drops of blood taken with a finger prick.
Rent the Runway beats Wall Street revenue estimates
Rent The Runway Inc.
Rent the Runway is surging in extended trading. The world’s first and largest shared designer closet topped Wall Street revenue estimates and matched the profit expectation.
Third quarter revenue rose 31% to $77.4 million. Active subscribers grew 15% for the three months ended October 31.
The net loss was $36.2 million compared to $88.1 million a year ago.
The company reported losses of -56 cents per share, $6.16 higher than the same quarter last year when the company reported EPS of $-6.72. Losses of -56 cents per share were anticipated by the eleven analysts providing estimates for the quarter.
Reuters contributed to this report.
GameStop posts 9.4% fall in third-quarter revenue
GameStop Corp posted a 9.4% fall in quarterly revenue on Wednesday as consumers cut back spending on discretionary items amid stubbornly high inflation.
The company launched a digital wallet earlier this year to enable transactions in a marketplace it is building for gamers and others to buy, sell and trade non-fungible tokens, or NFTs.
However, with crypto winter setting in and the value of cryptocurrencies plummeting, GameStop’s digital wallet ambitions face a bleak future.
Gaming companies are also facing a slowdown in demand for video games from pandemic highs, raising doubts about their ability to weather an economic downturn next year.
GameStop’s revenue in the third quarter fell to $1.19 billion from $1.30 billion a year earlier.
The company reported a net loss of $94.7 million, or 31 cents per share, in the quarter ended Oct. 29, compared with a loss of $105.4 million, or 35 cents per share, a year earlier.
Amazon, Google, Microsoft and Oracle nab cloud computing deals with Pentagon
The Department of Defense has awarded Amazon, Google, Microsoft and Oracle hybrid contracts to provide enterprise-wide, globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge.
The deals have ceilings of $9 billion each.
The work will be performed in Reston, Virginia. The estimated completion date is June 8, 2028. Washington Headquarters Services, Arlington, Virginia, is the contracting activity.
S&P 500 slides for fifth session, oil falls to $72 level
S P 500.
In a rudderless session, the S&P 500 and Nasdaq Composite notched modest losses while the Dow Jones Industrial Average was little changed as investors digested growing recession predictions against solid economic data points including 3Q productivity. In commodities, oil slipped another 3% to $72.01 per barrel.
Border Force workers at British airports to strike over Christmas — union
Border Force workers at several major British airports including the country’s busiest, London’s Heathrow, will go on strike for several days over the Christmas period in a dispute over pay, the PCS trade union said on Wednesday.
The union said staff employed by the Britain’s interior ministry, the Home Office, in passport booths would take action at Heathrow and Gatwick airports as well as Birmingham Airport, Cardiff Airport, Glasgow Airport, Manchester Airport and the Port of Newhaven.
The union’s General Secretary Mark Serwotka said around 2,000-3,000 staff would be involved in the walk outs on Dec. 23, 24, 25, 26, 28, 29, 30 and 31.
Car insurance rates headed higher
Car insurance rates will rise by 7%, to $1,895, in 2023, says Insurify.
The insurance comparison shopping website said nationwide, the average cost of car insurance rose by 9%, to $1,777 per year, in 2022.
Oregon, Maryland, and Virginia experienced the greatest increases in average car insurance costs in 2022, with premiums rising by more than 25% in all three states.
While prices stayed about the same in Michigan, rising just 1% year over year, the state remains the most expensive for car insurance. The average Michigan driver paid $2,895 for coverage in 2022, $1,188 more than the average American.
Southwest Airlines reinstates dividend, sees strong travel demand
Southwest Airlines Co on Wednesday became the first major U.S. airline to reinstate its quarterly dividend, more than two years after suspending it in the wake of the coronavirus pandemic.
U.S. airlines have benefited from pent-up demand for leisure trips and a gradual return of lucrative business travel, helping them post strong quarterly earnings despite worries of an economic slowdown.
In a regulatory filing ahead of its investor day on Wednesday, Southwest said it was expecting “strong leisure revenue trends” to continue into the first quarter of next year, while business travel was expected to improve.
The carrier also trimmed its fourth-quarter fuel cost forecast by about 5 cents per gallon, compared with its previous estimate.
Southwest declared a third-quarter dividend of 18 cents per share, the same level at which it was prior to the pandemic. The dividend will be paid on Jan. 31.
Used-car retailer Carvana slumps after Wedbush says bankruptcy risk rising
Shares of Carvana Co fell 40% in morning trade on Wednesday after Wedbush raised the possibility of a debt default by the used-car retailer, which would increase the risk of bankruptcy, and cut its price target to a Wall Street low of $1.
Brokerage Wedbush also downgraded its rating on the stock to ‘underperform’ from ‘neutral,’ sending Carvana’s shares to a record low.
“Many (Carvana) bonds have been trading at about 50 cents on the dollar, indicating investors see a high probability of default,” said analyst Seth Basham, in a note titled ‘Bankruptcy risk rising.’
On Tuesday, Bloomberg News reported some of Carvana’s largest creditors including Apollo Global Management Inc and Pacific Investment Management Co have signed a cooperation agreement to act together in any restructuring negotiations.
Combined with the departure of Carvana’s director of investor relations, Wedbush said it believed the developments indicate a higher likelihood of debt restructuring that could “leave the equity worthless in a bankruptcy scenario, or highly diluted at best.”
Carvana has suffered from waning used-car demand and high costs, forcing it to undertake job cuts to rein in expenses. Last month, it cut about 1500 employees or 8% of its workforce in the latest round of job cuts this year.As a result, its stock has fallen nearly 100% this year, hitting record lows in the process.
GSK, Sanofi shares soar as Zantac litigation fears abate
Shares of GSK and Sanofi surged on Wednesday, adding more than $20 billion in combined value in early trade following the dismissal of thousands of U.S. lawsuits claiming that the heartburn drug Zantac caused cancer.
The ruling on Tuesday by U.S. District Judge Robin Rosenberg in West Palm Beach, Florida, knocked out about 50,000 claims in federal court on the basis that they were not backed by sound science.
The drugmakers, citing scientific consensus, have repeatedly asserted that Zantac does not cause cancer.
“This outcome is probably the best GSK could have hoped for given how comprehensively the judge in the case dismissed the plaintiffs’ arguments,” said AJ Bell investment director Russ Mould. “While there is some risk of an appeal, and there are other cases outstanding, GSK will be sitting a lot more comfortably than it was before this judgement was handed down.”
Reuters contributed to this report.
Juul reaches settlements covering more than 5,000 cases
Juul Labs has reached settlements covering more than 5,000 cases brought by about 10,000 plaintiffs related to its vaping products.
Financial terms of the settlement were not disclosed, but Juul said that it has secured an equity investment to fund it.
Buffeted by lawsuits, Juul announced hundreds of layoffs last month and bankruptcy appeared increasingly likely as it secured financing to continue operations.
The e-cigarette maker faced thousands of suits brought by individuals and families of Juul users, school districts and Native American tribes. This week’s settlement resolves those cases, which had been consolidated in a California federal court pending several bellwether trials.
Homebuilder Toll Brothers tops Wall Street forecasts
Toll Brothers Inc.
Toll Brothers Inc. (TOL) on Tuesday reported fiscal fourth-quarter earnings of $640.5 million.
The Fort Washington, Pennsylvania-based company said it had profit of $5.63 per share. Earnings, adjusted for non-recurring gains, were $4.67 per share.
The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $3.88 per share.
The home builder posted revenue of $3.71 billion in the period, which also beat Street forecasts. Four analysts surveyed by Zacks expected $3.22 billion.
For the year, the company reported profit of $1.29 billion, or $10.90 per share. Revenue was reported as $10.28 billion.
Campbell lifts forecasts on firm demand for pricier meals, snacks
Campbell Soup Co raised its annual sales and profit forecasts on Wednesday, supported by easing supply-chain issues and steady demand for its soups and meals even as the company raised prices to offset rising costs.
Packaged food manufacturers in North America have seen relatively little pushback from shoppers despite multiple rounds of price hikes this year, as they turn to cooking more at home.
The Prego pasta sauces owner expects fiscal year 2023 net sales to rise 7% to 9%, compared with its previous forecast of a 4% to 6% increase.
Its net sales rose 15% to $2.58 billion in the first quarter, beating estimates of $2.45 billion, according to Refinitiv IBES data.
The company said easing production and shipping challenges helped it get more products to retailers’ shelves.
Campbell said average selling prices across its meals & beverages, and snacks divisions rose 16% in the first quarter, while overall sales volumes fell about 1%.
Stocks struggle for direction
U.S. stocks lacked momentum in early trading as recession warnings mount amid more reports of looming layoffs and hiring freezes. Over the last five days, the Dow has shed 3.29%, the S&P 4.29%, while the tech-heavy Nasdaq lost 5.28%.
In commodities, oil stabilized at the $74 per barrel level after dropping to the lowest price since December 2021.
Futures at a glance
U.S. stock futures are in the red again on Wednesday as commodities rise into positive territory.
Dow Jones Industrial Average futures are down 117 points, or 0.35%, while S&P 500 and Nasdaq Composite futures are off 0.6% and 1%, respectively.
Over the last five days, the Dow shed 3.29%, the S&P fell 4.29%, while the tech-heavy Nasdaq lost 5.28%.
The U.S. Tech 100 is also down on Wednesday, slipping 2.01% below the redline but holding onto a slight gain of 0.4% over the last five days as tech stocks begin to fall. Shares of Meta finished Monday’s session down 6.79%. Apple closed 2.54% lower, while Microsoft and Alphabet were off 2.03% and 2.51%, respectively.
In other tech stocks, shares of Nvidia fell 3.75% and Amazon was 3.03% lower.
Meanwhile, West Texas Intermediate crude futures jumped 1% to $75.14 a barrel, as gold holds a 0.32% gain to $1,788.10 an ounce.
U.S. crude and gold remain mixed over the last five days with oil skidding 7.57% and gold adding 0.17%.
China’s Xi Jinping meets with Saudi rulers in economic power play: ‘No longer a competitor’
Chinese President Xi Jinping will visit Saudi Arabia this week for meetings that could see tens of billions of dollars invested in the country.
“I would argue that this is a big turning point,” Dr. Theodore Karasik, the fellow on Russian and Middle Eastern affairs at the Jamestown Foundation, told FOX Business. “It’s probably an inflection point for the region in terms of China’s presence, and it means that Beijing is no longer a competitor to them.”
“Because of the shifting security environment, and because of where geoeconomics is heading, the logical choice for the Saudis is to go east,” he added.
Xi will land in Saudi Arabia on Thursday to kick off three days of meetings between leaders of the two nations, aiming to strengthen an already rosy partnership between Beijing and Riyadh: China has ranked first for Saudi Arabia’s exports and imports since 2018, according to the Saudi Press Agency.
Sen. Raphael Warnock wins Georgia Senate runoff, defeating GOP challenger Herschel Walker
Democratic Sen. Raphael Warnock will defeat Republican challenger Herschel Walker in Georgia’s high stakes Senate runoff election, The Associated Press projects.
While the Senate majority has already been decided, Warnock’s victory in the last ballot box showdown of the 2022 midterm elections gives the Democrats a 51-49 margin in the chamber and a bit of breathing room in their razor-thin control of the Senate.
“Thank you, Georgia. We did it again,” Warnock tweeted soon after his victory was projected.
Cryptocurrency prices for Bitcoin, Ethereum and Dogecoin were lower Wednesday morning
Bitcoin was trading around $16,000, after trading higher in three of the last five days.
For the week, Bitcoin has gained more than 3%.
The cryptocurrency has lost more than 63% year-to-date.
Ethereum was trading around $1,200, after gaining more than 4% in the past week.
Dogecoin was trading at 9 cents, after losing more than 1% in the past week.
Gasoline price slide continues
The nationwide price for a gallon of gasoline slipped Wednesday to $3.355, according to AAA.
The average price of a gallon of gasoline on Tuesday was $3.38.
One week ago, a gallon of gasoline cost $3.495. A month ago, that same gallon of gasoline cost $3.804.
Gas hit an all-time high of $5.016 on June 14.
Diesel declined to $5.031.
Oil edges lower ahead of inventory report
Oil futures traded lower Wednesday, adding to recent declines ahead of the week inventory report and uncertainty about how a Western cap on Russian oil prices would play out.
There is a potential drawdown in U.S. crude stockpiles of around 6.4 million barrels, according to API figures.
U.S. crude futures traded around $73.00 a barrel.
Brent crude futures traded around $78.00 a barrel, after they fell below $80 in the previous trading session.
Oil prices have dropped by more than 1% for three straight sessions, giving up most of their gains for the year, according to Reuters.