The daily business briefing: April 27, 2023
U.K. antitrust regulators block Microsoft's acquisition of Activision Blizzard, Meta reports strong earnings as AI boosts traffic and ad sales on Facebook and Instagram, and more
U.K. regulator blocks Microsoft acquisition of Activision Blizzard
Britain's antitrust regulator said Wednesday it was blocking Microsoft's purchase of Activision Blizzard, saying the deal would lead to "reduced innovation and less choice for U.K. gamers over the years to come." Microsoft already has a 60 percent to 70 percent share in cloud gaming globally, and the $69 billion acquisition woule make it "even stronger," the U.K. Competition and Markets Authority said. Antitrust regulators in other countries also are trying to disrupt what would be one of the tech industry's biggest deals. The Federal Trade Commission in the U.S. filed a lawsuit in December seeking to thwart Microsoft's takeover of the game maker. A hearing in that case is scheduled for August.
Meta reports strong quarter as AI boosts traffic, ad sales
Facebook-owner Meta Platforms on Wednesday reported quarterly profit and revenue that beat expectations. CEO Mark Zuckerberg said AI, which Meta was slow to adopt but has started investing in heavily, was helping the company boost traffic and increase ad sales on Facebook and Instagram. The company forecast quarterly revenue exceeding analyst expectations. Meta also narrowed its cost outlook for the year after starting aggressive cost-cutting in what Zuckerberg has described as the company's "year of efficiency." Meta shares jumped 12 percent in after-hours trading following the report, helping to extend a tech rally that began when two other tech giants, Google-parent Alphabet and Microsoft, reported strong quarterly results on Tuesday.
Disney sues DeSantis and his hand-picked oversight board
Walt Disney Parks and Resorts filed a lawsuit Wednesday against Florida Gov. Ron DeSantis (R) and his hand-picked oversight board, accusing them of abusing their political power to punish the entertainment company for excercising its right to free speech. Disney sued after the people DeSantis put on the special-taxing-district board moved to restore power Disney tried to dilute just before the takeover. The lawsuit calls the board's effort the "latest strike" in "a targeted campaign of government retaliation" by DeSantis since Disney spoke out in opposition to Florida Republicans' Parental Rights in Education law, which critics call the "don't say gay" bill. The legislation prohibits lessons about sexual orientation or gender identity in public schools.
Stellantis offers buyout to cut costs as it invests in EVs
Jeep maker Stellantis confirmed Wednesday that it will offer buyout packages to 2,500 white-collar employees and 31,000 hourly workers as it slashes costs to help cover its shift to electric vehicles. "The competition is fierce, and the cost of electrification cannot be passed on to the customer," Mark Stewart, Stellantis' North American chief operating officer, said in an email to employees. Stellantis, which also owns Chrysler, Dodge and Ram, aims to reduce the hourly workforce by about 3,500 employees, The Wall Street Journal reported, citing a letter posted on Facebook by a union that represents a Stellantis stamping plant in suburban Detroit. "Factory workers with seniority could receive $50,000 to leave their jobs," the Journal said.
Stock futures rise as tech rally continues
U.S. stock futures gained early Thursday as strong quarterly results from Facebook-parent Meta kept a tech rally alive. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.5 percent at 7 a.m. ET, while those of the tech-heavy Nasdaq were up 0.7 percent. Meta shares surged but, in a sign of ongoing troubles in the banking sector, First Republic shares plunged 30 percent on Wednesday after falling 49 percent on Tuesday as investors questioned the regional bank's financial health. Southwest shares fell 3 percent in pre-market trading after the airline reported a $159 million first-quarter loss as the effects of its holiday meltdown extended into 2023. Merck reported falling revenue as demand for its COVID-19 antiviral treatment fell sharply.