The daily business briefing: July 8, 2022
A jury finds former Theranos CFO guilty of fraud, GameStop fires CFO in turnaround push, and more
Jury finds former Theranos CFO guilty of fraud
A jury on Thursday found former Theranos executive Ramesh "Sunny" Balwani guilty of working with disgraced Theranos CEO Elizabeth Holmes to defraud investors and patients by making false promises about their company's unreliable blood tests. The 12 jurors found Balwani guilty on all 12 felony counts. Holmes was found guilty on four of 11 fraud counts earlier this year in her trial, in which she accused Balwani of sexually and emotionally abusing her when they were lovers, and manipulating her. Balwani's lawyers tried to shift the blame onto Holmes, once a rising star in Silicon Valley and the face of the company's effort to woo investors. Both Holmes, 38, and Balwani, 57, could be sentenced to up to 20 years in prison.
GameStop fires CFO as part of turnaround push
GameStop announced Thursday it had fired its chief financial officer, Mike Recupero, as part of an aggressive attempt to turn around the struggling bricks-and-mortar videogame retailer. The company also said it is making broad staff cuts. A person familiar with the situation said GameStop chairman Ryan Cohen pushed out Recupero about a year after he was hired because he was "too hands-off" and "not the right culture fit." GameStop's chief accounting officer, Diana Jajeh, will become the new CFO. GameStop announced the layoffs in a memo to employees, saying they were necessary to "reduce bloat," CNBC reported. GameStop shares fell 5 percent in after-hours trading.
U.N. World Food Program director warns of looming hunger crisis
The United Nations World Food Program's director warned Thursday that a hunger catastrophe could erupt in the next two years. WFP Director Patrick Beasley called for immediate action, including the lifting of a Russian blockade preventing the shipment of 25 million tons of Ukrainian grain. The number of people the U.N. classified as "acutely food insecure" was 130 million before the coronavirus pandemic. After COVID, it increased to 276 million. "This number has increased to 345 million due to the Ukraine crisis," Beasley said. Russia's invasion of Ukraine, a global breadbasket, has caused soaring prices and shortages of basic foods. "The international community must act to stop this looming hunger catastrophe in its tracks — or these numbers will explode," Beasley said.
Elon Musk cools on Twitter deal as questions about spam accounts linger
Elon Musk's deal to buy Twitter is in peril because his team has concluded there's no way to verify Twitter's figures on how many of its users are real and how many are spam accounts, The Washington Post reported Thursday, citing three people familiar with the matter. Musk has reportedly cut back on talks about funding for the $44 billion deal. In addition to the questions about spam accounts, Twitter's stock has fallen sharply since Musk initiated his takeover bid in April, raising concerns he could be paying too much for the social media giant. But backing out would be difficult, because the deal's terms require Musk to go through with the acquisition unless there's a major change to Twitter's business.
Stock futures fall ahead of jobs report
U.S. stock futures fell early Friday ahead of the June jobs report. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.2 percent and 0.3 percent, respectively, at 6 a.m. ET. Nasdaq futures were down 0.5 percent. The three major U.S. indexes rallied on Thursday. The Dow and the S&P gained 1.1 percent and 1.5 percent, respectively, while the tech-heavy Nasdaq jumped 2.3 percent. The June employment report is expected to show that U.S. employers added 250,000 jobs last month, with the unemployment rate remaining at 3.6 percent, according to Dow Jones. That would indicate continued strong hiring despite rising concerns about a possible recession.