The daily business briefing: October 4, 2021
Facebook whistleblower reveals identity, China's Evergrande halts trading ahead of expected deal, and more
Facebook whistleblower reveals identity on '60 Minutes'
A Facebook whistleblower who released internal research indicating the company was aware its social media platforms, including Instagram, could harm teens revealed her identity Sunday night on CBS' 60 Minutes. "The thing I saw at Facebook over and over again was there were conflicts of interest between what was good for the public and what was good for Facebook, and Facebook over and over again chose to optimize for its own interests, like making more money," said the whistleblower, Frances Haugen, a 37-year-old former Facebook product manager who worked on civic integrity issues. Facebook has called the allegations "misleading." "To suggest we encourage bad content and do nothing is just not true," said Facebook spokesperson Lena Pietsch.
Evergrande halts trading ahead of expected deal
Distressed property giant China Evergrande halted trading on Monday ahead of an announcement that it would sell a half-stake in its property management unit to Hopson Development for more than $5 billion. Hopson also requested a trading halt. The looming deal came as China's crackdown on debt has left Evergrande unable to refinance its $305 billion in liabilities, raising concerns that the crisis could spread to other companies in China's property sector if Evergrande collapses. Selling an asset like this indicates Evergrande is trying to quickly come up with cash, said OCBC analyst Ezien Hoo. "I'm not sure this necessarily means that the company has given up on surviving, especially as selling an asset means they are still trying to raise cash to pay the bills," Hoo said.
Report: Pandora Papers show how world leaders hide wealth
The Washington Post reported Sunday that millions of private financial records shared with the newspaper showed that members of the global elite, including King Abdullah II of Jordan and other country leaders, used a secretive offshore system to hide billions of dollars from tax authorities, creditors, criminal investigators, and others. The documents detailed the Jordanian king spent more than $100 million on luxury homes in Malibu, California, and other places. Leaders of the Czech Republic, Kenya, Ecuador, and other nations hid millions of dollars' worth of property and cash. The trove of documents, called the Pandora Papers, was far larger than the Panama Papers disclosed in an investigation five years ago.
U.S. stocks fall ahead of 1st full week of October trading
U.S. stock index futures fell early Monday ahead of the first full week of trading in October, typically a volatile month. Futures tied to the Dow Jones Industrial Average were down by 0.2 percent several hours before the opening bell. Futures for the S&P 500 and the Nasdaq fell by 0.3 percent and 0.4 percent, respectively. Stocks rose on Friday, the first trading day of the month, after news of the first pill to treat COVID-19 boosted stocks positioned to benefit most from an economic reopening. Analysts said the fourth quarter should be strong but bumpy. "Q4 2021 will likely record a higher-than-average return," said CFRA chief investment strategist Sam Stovall. "However, investors will need to hang on tight during the typically tumultuous ride in October, which saw 36 percent higher volatility when compared with the average for the other 11 months."
Report: Volvo preparing for IPO
Swedish auto maker Volvo Cars, which is owned by China's Zhejiang Geely Holding Group Co., is completing plans for an initial public offering that could value it at up to $25 billion, The Wall Street Journal reported, citing people familiar with the matter. The company could announce the listing as early as Monday. If Volvo goes ahead with the plan, it would mark a sharp turnaround after Ford sold the company to Geely for $1.8 billion in 2010. Volvo has held onto its reputation for safety while becoming profitable and mapping out electric-car rollouts faster than many rivals, making its brand more popular in the United States and other markets, and helping it compete against German premium brands such as BMW, Volkswagen, and Mercedes-Benz.