The daily business briefing: February 8, 2022
Frontier agrees to buy fellow discount airline Spirit, early Facebook investor Peter Thiel steps down from Meta board, and more
Frontier to buy Spirit Airlines in deal worth $6.6 billion
Frontier on Monday agreed to buy rival low-cost airline Spirit for $2.9 billion in cash and stock. The total value would be $6.6 billion, including debt and operating leases. If the sale goes through, it will create the nation's fifth-biggest airline and a discount-flight powerhouse more able to compete with bigger carriers. Low-cost airlines have shaken up the airline industry in recent years by offering passengers often far cheaper flights by cutting frills. The consolidation comes as the travel industry tries to rebound from a painful pandemic-induced slowdown while still fighting higher costs and labor shortages caused by COVID-19. Spirit shares jumped by 17 percent on Monday. Frontier rose by 3.5 percent.
Early Facebook investor Peter Thiel stepping down from Meta board
Billionaire tech investor and PayPal co-founder Peter Thiel is stepping down from the board of Facebook's parent company, Meta, after its next meeting, the company announced Monday. The news came after Meta's stock price dropped 26 percent last Wednesday and the social media giant reported that last quarter, for the first time in its history, it lost daily users. Thiel, Facebook's first outside investor, joined the company's board in 2005. In a statement, Meta Chairman and CEO Mark Zuckerberg said he was "deeply grateful" for Thiel's contributions to Facebook. Thiel, a supporter of former President Donald Trump, reportedly plans on turning to help elect Republicans J.D. Vance and Blake Masters to the U.S. Senate in Ohio and Arizona.
Rumble offers Joe Rogan $100 million to switch from Spotify
Conservative video hosting website Rumble on Monday tweeted an offer to pay popular podcaster Joe Rogan $100 million to leave Spotify and bring his show, The Joe Rogan Experience, to its platform. Rogan and Spotify apologized for Rogan's airing of inaccurate COVID-19 information and his use of racial slurs as several recording artists, starting with Neil Young, pulled their music off the streaming platform in protest. Rumble bills itself as an anti-censorship platform and is popular with the American right, and its CEO, Chris Pavlovski, said in a letter to Rogan posted on Twitter that his company is ready to "stand with you, your guests, and your legion of fans in desire for real conversation."
Peloton co-founder John Foley to step down as CEO
Peloton co-founder John Foley is stepping down as CEO after leading the fitness company since it launched a decade ago, The Wall Street Journal reported Tuesday. The company said it also planned to cut costs — including 2,800 jobs — and shake up its board. Foley will become executive chair. Peloton's sales of its exercise bikes and treadmills with streaming fitness classes soared early in the coronavirus pandemic as lockdowns forced people to spend more time at home. But demand has fallen sharply as COVID-19 restrictions eased. Activist investor Blackwells Capital has called for firing Foley and exploring a sale. Amazon, among others, has expressed interest.
Stock futures little changed after Monday's swings
U.S. stock index futures were flat early Tuesday after choppy trading on Monday. Futures tied to the Dow Jones Industrial Average were up by less than 0.1 percent at 6:30 a.m. ET. Futures for the S&P 500 and the Nasdaq were down by 0.1 percent. The S&P 500 and the tech-heavy Nasdaq closed down on Monday by 0.4 percent and 0.6 percent, respectively, after giving back earlier gains. The Dow closed flat as investors continued to brace for the Federal Reserve to start raising interest rates to fight high inflation. "U.S. stocks will struggle for direction until the latest inflation tilts market's expectations as to how aggressive the Fed will tighten into what is still deemed as an overvalued stock market," said Oanda's Edward Moya.