The daily business briefing: September 13, 2022
Peloton announces resignations of Foley and another co-founder, Blue Origin suffers its first rocket-launch failure, and more
Peloton says Foley and another co-founder resigning
Peloton co-founder and former CEO John Foley and other senior executives are leaving the streaming fitness-equipment company, Peloton announced Monday. Foley resigned as CEO in February but had stayed on as executive chairman of the board. Another co-founder, chief legal officer Hisao Kushi, also is leaving. Peloton has struggled to reverse big losses after benefiting from a spike in sales when people were forced to work, play, and exercise at home during early coronavirus pandemic shutdowns. The new CEO, Barry McCarthy, announced the shakeup weeks after Peloton reported a $1.2 billion quarterly loss and a nearly 30 percent revenue decline. "We slashed pricing in order to survive," McCarthy said. "We've stopped the bleeding."
Blue Origin suffers its 1st rocket-launch failure
Blue Origin's New Shepard rocket suffered an unspecified booster failure just over a minute after launch on Monday, triggering its unoccupied capsule's emergency abort system. The capsule's single engine blasted it away from the booster rocket. The capsule — carrying science experiments from schools, universities, and other organizations, but no people — landed safely in the West Texas desert under parachute. It was the first failed launch for Blue Origin, Amazon founder Jeff Bezos' spaceflight company. The failure occurred at Max Q, the moment when an ascending rocket hits its most intense aerodynamic stress. Blue Origin has flown 31 people on suborbital flights and aimed for more flights this year, but those plans are on hold pending a Federal Aviation Administration investigation.
Biden pushes to avert rail strike that could worsen supply problems
President Biden and members of his Cabinet are talking with leaders of unions and rail companies to avert a freight-rail strike that could worsen the nation's supply-chain problems. Negotiations between the unions, which represent about 60,000 workers, and the railroads have hit an impasse before a Friday deadline, when a cooling-off period Biden imposed two months ago expires. Biden's Presidential Emergency Board has recommended a settlement that includes an immediate 14 percent raise and more raises going forward, among other benefits. About 45,000 other rail workers are represented by unions that have reached tentative contract deals, but a strike by engineers and conductors represented by the still-negotiating unions could halt railways that carry nearly 30 percent of the nation's freight.
WSJ: Twitter shareholders backing Musk takeover by wide margin
Twitter shareholders are on the verge of approving Tesla CEO Elon Musk's proposed $44 billion takeover, despite Musk's efforts to back out of the deal, The Wall Street Journal reported Monday, citing people familiar with the matter. Early votes indicate that shareholders are backing the deal overwhelmingly, the Journal's sources said, although the margin could change because investors can switch their votes through a Tuesday afternoon meeting. Twitter is fighting in court to force Musk to go through with the acquisition. Musk, whose 10 percent stake already makes him Twitter's largest shareholder, says the social media company has failed to accurately tell him what percentage of its user accounts are fake.
Stock futures rise ahead of inflation report
U.S. stock futures rose early Tuesday ahead of a key inflation report. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up 0.5 percent at 6:45 a.m. ET. The August consumer price index, coming out at 8:30 a.m., is likely to show a 0.1 percent drop month-to-month, according to Dow Jones estimates. Year-over-year, the index is expected to show 8 percent inflation, down from 8.5 percent in July. Falling gas prices and supply-chain improvements have helped bring down inflation, although economists expect the Federal Reserve to end its Sept. 20-21 meeting with its third straight 0.75 percentage point interest rate hike, continuing its aggressive effort to fight high inflation.